The Market, COVID-19 Effects and the Future
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The UK is among Europe's largest markets for electric vehicle sales. Electric Vehicle sales has shown a huge increase since 2010. In 2018 the market is estimated to be stood at $2.4 b with a robust CAGR rate of more than 14%
The global market has also shown a similar increase between the same term, Year-over-year growth were between 50-60% on recent years. In absolute terms, China is the world`s largest Electric vehicle market with more than 2.4 million electric vehicles on the roads and account around 45% of the global fleet. It is followed by European market and US market. While saying that, Electric vehicles are only 4% of total vehicles in China. In Europe zone, only Norway is approaching 50% share mark with new cars running on electricity. The largest markets in Europe is Germany, UK, Netherlands, Norway and France.
Charging times and high costs associated with the purchase of a new electric vehicle were among the main concerns among new car intenders in the United Kingdom. The most recent advancements in the industry has reverted the main concerns by reducing charging times lower than 20 min (Rapid Chargers) and price reduction on new models by the help of giant investments from OEMs as well as more than 70 new electric vehicle introduction into the competition.
The governments set our ambitious objectives to reach zero emission in global. The phase out of sales of Internal combustion vehicles (esp diesel) are targeted for 2020 (S Korea, Austria), 2025 (Norway, Athens, Madrid, Paris, Brussels), 2030 (Denmark, Germany, India, Netherlands), 2035 (UK) and 2040 (China, France, Taiwan).
UK Government Objectives “Road to Zero: Net Zero by 2050, ending the sale of petrol and diesel by 2035”
The Government published its Road to Zero Strategy in 2018. The strategy sets out an “ambition” for at least 50% — and as many as 70% — of new car sales to be ultra-low emission by 2030, alongside up to 40% of new vans. The Government’s Road to Zero strategy largely relies on replacing petrol and diesel vehicles with low and zero emission electric vehicles (EVs). To do so it set the “ambition” that by 2050 almost every car and van will be zero emission and has since moved its planned date for ending the sale of petrol and diesel vehicles from 2040 to 2035.
The UK government currently offers plug-in vehicle grant for eligible vehicles.
The Charging Point Market in UK:
It is undoubtedly one of the most important factors for electric vehicles to be wide stream. Based on Zap-map data, there are currently 18,157 public charging devices available nationwide. There are 100 locat authorities with fewer than 100 public charging devices per 100,000 population and there is at least 95% of service areas have a rapid charge point. (Parliament UK, 2020). Greater London area has 25.6% share of all charging points.
• The Electric Vehicle Home charge Scheme (EVHS) provides grant funding of up to 75% towards the cost of installing electric vehicle charge points at domestic properties across the UK.
• EV charge points cannot be installed in all properties. For instance, terraced or apartments properties may not have allocated off street parking. The On-street Residential Charge Point Scheme (ORCS) provides grant funding for local authorities towards the cost of installing on-street residential charge points for plug-in electric vehicles.
• The Workplace Charging Scheme (WCS) is a voucher-based scheme that provides support towards the up-front costs of the purchase and installation of electric vehicle charge-points, for eligible businesses, charities, and public sector organisations.
UK car sales plunge to lowest since 1946 amid corona virus lock-down: Overall UK car sales crashed by 97% in April 2020.
o Based on SMMT figures, 4,312 new car registration in April`20, -97.3% lower compared with April`19 (161k)
o YTD (year to date) values are -47.3% compared with 2019 new car registration numbers.
· Battery Electric vehicle (BEVs) sales offered a small hope for the industry, with sales down by just 9.7% in April`20, meaning 32% of all sales were of battery electric cars with zero exhaust emissions of carbon dioxide – the highest market share so far.
o Tesla Model 3 was the bestselling car in April, Jaguar Land Rover’s I-Pace, an electric SUV, was the second bestselling car.
o Year to date, Battery Electric vehicles change compared with 2019 is 161%
· Post COVID-19, the global electric vehicle and electric vehicle infrastructure market is projected to reach 4.18 million units by 2021 from an estimated 3.42 million units in 2020, at a CAGR of 22.1%. The projection for 2021 is expected to be down by 34% as compared to pre-COVID estimation
o However, recent statistics show that Electric Vehicles are positively affected by the current pandemic by increasing the sales numbers
· Charging infrastructure has shown a slow growth in recent months. While the average monthly increase in charging points were around 800-1,000 between July 2019 to Jan 2020. Between Mar-2020 to May 2020, the growth in numbers are about 400 (Mar-Apr) and 90 (Apr - May).
· The Future of Electric vehicle market seems promising, despite of struggling Automotive manufacturers due to locked down factories and loss of workforce. The sales & demand for EVs are increasing, this creates an opportunity for pure Electric Vehicle manufacturers (such as Rivian) and relevant industry players such as Charging point firms.
o Governments cuts down the grant amounts from £500 to £350 for charging point installation
o Brexit is expected to negatively affect the supply-chain of Automotive industry (extra costs)
o Lock-down of production facilities and loss of workforce has forced OEMs to cut budget on new model launches, and delay current model productions
o In 2020, regardless of Covid-19 lock down, Electric Vehicle Sales (demand) has increased by 161% while Diesel sales decreased 60% and Petrol 47.5%.
o In April 2020, the new car registration numbers are reduced by a huge 97.3% compared with 2019-April. Whereas BEV numbers only fell about 10%.
o Governments haven`t announced any change in the current carbon emission targets, on the contrary some energy firms recently set out parallel targets to reduce carbon footprints (Shell), which would support the growth of Electric Vehicle industry on long term.