How car manufacturers can help drive electric vehicle adoption

Julia Sklar
By Julia Sklar under Insights 01 February 2019

Everyday electric vehicles have arrived. With reasonably priced consumer models like the Nissan Leaf and the Renault Zoe entering the market and price parity with petrol and diesel expected by 2025, an electric vehicle is a more viable option than ever for consumers and fleets. However, there are still significant barriers preventing their widespread adoption. This article looks at what’s driving the electric revolution and examines the barriers to adoption.

Shifting to electric is critical for improving cities

Electric vehicles are the here and now, and all signs point towards them playing a prominent role in a lower emissions future. The green benefits of electric are twofold: firstly, they do not release harmful exhaust emissions into the atmosphere. This is particularly pertinent in cities such as London, where every area of the city breaches World Health Organisation standards for toxic PM2.5 particles. These particles are connected with many of the biggest public health issues, from childhood asthma to cardiovascular and respiratory diseases.

Secondly, electricity generation is becoming greener across the world too. In the UK, renewable energy made up 33% of power generated in 2018 - a sizeable leap when you consider that just 5.9% of energy was generated by renewables in Q2 2010.  

Both governments and car manufacturers have made pledges towards creating a greener Britain

The UK government offers purchase grants for electric or hybrid cars, as well as grants for installing a charging point in your own driveway. Furthermore, electric cars are exempt from vehicle tax and the London Congestion Charge, whilst electricity is not subject to fuel tax.

As well as carrots, the government also employs sticks: the sale of petrol and diesel cars will be outlawed from 2040 (including hybrids), and certain cities, such as Oxford, are already banning petrol and diesel vehicles within their centres.

Meanwhile, certain manufacturers have pledged to phase out the manufacture of petrol and diesel vehicles. Those who have pledged changes include Volvo and Jaguar Land Rover, who have announced that all new release models will be either electric or hybrid by 2019 and 2020 respectively. Mercedes meanwhile, have promised electric versions of all its models by 2022.

Demand for electric vehicles will need to grow significantly if targets are to be hit

The outcome of all this is that the UK government has pledged that half of all new car sales will be hybrid or electric by 2030.  

However, we’re nowhere near there yet. A measly 1 in 500 new vehicles sold are electric vehicles, with hybrids and ICE vehicles overshadowing pure plug-in electrics.

What this means is that 1 in 1000 cars currently on British streets are electric. You are fairly unlikely to encounter an electric car day to day, particularly outside of big cities.

Compare this to norway, where 4 in 10 cars sold are electric, and 10% of all stock is electric.

It will take a huge percentage of EV sales to switch the stock in favour of electric when you consider that the average vehicle is on the road 14 years before it is scrapped. At the moment, it seems people in the UK simply aren’t adopting at the necessary rate.

Misgivings about Electric Vehicles are lagging behind the reality of ownership

The main reasons people give for not buying an electric vehicle relate to charging: a perceived lack of charging points, fear of being out of range, long charging time. The other perceived barriers relate to cost: both the upfront purchase cost of a vehicle, as well as cost to maintain and charge. 

To some extent these barriers are more perception than reality. The UK has 6645 public charging stations, compared to 8407 petrol stations -  hardly a vast gap even if the charging stations are somewhat more concentrated in the South. Furthermore, electric vehicle owners have the option of installing a charging point in their own home, thus rendering a trip to a station redundant.

Fear of being out of range is the second largest barrier to purchase - but again, this fear may be less grounded than it seems. The range of commercial electric cars is constantly improving - with the Tesla Model S boasting a range of 335 miles, comparable to a petrol or diesel car. Granted, a typical electric car’s range may be half of this - but this is often plenty when you consider that only 2% of trips people make each year are over 50 miles. 

Long charging time is also less of a barrier than it may at first appear. Whilst the common type of public charger charges a car in 3-4 hours, charging technology is improving all the time. Tesla’s Supercharger charges a Tesla to 80% in 30 minutes, whilst a research group with members including Porsche and BMW have developed a charger which can charge a BMW i3 to 80% in 15 minutes. Regardless, many electric car owners may never have to use a public charging point, instead opting to charge up their vehicle overnight at home.

The cost of initial vehicle purchase remains high, largely down to the high price of the battery. However, the cost of lithium- ion batteries is falling all the time, and price parity with petrol and diesel vehicles is expected by 2025. When it comes to cost to run, an electric vehicle is roughly four times cheaper at spanning the same mileage.

The true barrier to adoption is the leap into the unknown

Ultimately, purchasing an electric vehicle is a leap into the unknown. Given their rarity, most prospective customers will not have driven one, or even been a passenger in one. For a buyer to adopt an electric vehicle it would mean giving up the convenience of petrol stations and the assurance of 300-400 mile range and learning to deal with charging up at public charge points, coping with range anxiety or installing a home charger.

In order to convince people to go electric, OEMs, charging point operators and other players could do more to break down this  confidence barrier. Propositions that focus on convenience and charging will likely do particularly well.

In our next blog we’ll investigate further the electric vehicle opportunity for businesses and what they can offer to customers.