In this series Philip Nothard, Insight and Strategy Director for Cox Automotive UK, takes a deep dive into some of the key trends emerging in 2021, how they could evolve in the coming year, and how retailers can capitalise on them.
It is now two years since the launch of the UK Government’s flagship Road to Zero Strategy. The proposal set out plans for an expansion of green infrastructure across the country; a reduction in emissions; and promoting the uptake of zero emission cars, vans, and trucks. More recently, the UK Government has consulted on bringing forward plans to ban the sale of all conventional petrol and diesel engines by 2030; an advance on the 2040 date set in the Air Quality Plan of 2017.
COVID-19 has clearly had an impact on immediate environmental concerns; however, the medium and long-term opportunity for the decarbonisation of transport is more important than ever. In a sign of the importance of electrification in consumer and business minds, the first World EV Day took place in September 2020, with more than 50 organisations partnering with the inaugural digital initiative and in excess of 1,600 people signing the EV pledge worldwide.
Alongside the social media activity, government and business took the opportunity to share tangible actions. The UK Government announced £12m in funding for EV research and £9.3m via Highways England to support local authorities encouraging businesses to go electric. This is in addition to several existing infrastructure investment schemes and vehicle subsidy programmes.
Legislation and infrastructure
One of the biggest challenges when it comes to EV infrastructure is the mismatch between consumer perceptions, industry projections and the reality of getting charging points in the ground. Countless research into consumer and business attitudes to electric vehicles has been done by government and industry, with the vast majority of surveys continuing to highlight concern around where and how to charge, the availability of charging points, the time taken to recharge and range anxiety.
However, while this underscores a need for continued education around EV charging, the reality is between 2017 and 2019, the number of connectors almost doubled. Data from Zap-Map in September 2020 highlighted more than 12,000 charging locations with 19,500 devices and 34,000 connectors. There is arguably enough infrastructure for the current demand, but the question is how much is reliable, maintained, suitable for the latest EVs, and located in the right place.
To address the problem, Government and private sector investment is rife. The UK Treasury’s Charging Infrastructure Investment Fund (CIIF) now has substantial deployable capital to accelerate the rollout of public EV charging infrastructure.
Of course, it is difficult to know how and where to invest when the potential scale of the opportunity has received wildly different estimates.
Vehicle servicing in an electric era
While historically the servicing, maintenance, repair and preparation of electric and hybrid vehicles has been left to specialist workshops or the manufacturer themselves, the growth in uptake means this is a trend which those operating throughout the supply chain can no longer ignore.
With potential injuries or worse being the outcome of mishandling a battery or high voltage system, it is important to ensure those working on and transporting alternatively fuelled vehicles know what they are dealing with. Several training programmes exist across the industry, such as the IMI Levels 1 to 5 Awards, to equip technicians with the skillset to work on these vehicles; however, access to talent remains an issue.
Unfortunately, battery degradation remains part of the ownership experience when it comes to electric and hybrid vehicles, albeit usually not until around 100,000 miles or 12 years. This does, however, provide opportunities for manufacturers and retailers to engage with the customer and provide support and added value throughout the vehicle lifecycle.
EV acceleration in retail
With manufacturers required to meet tough emissions reduction targets by 2021, there is a strong imperative to get new electric vehicles off the production line and into customers’ hands. There are now more than 80 plug-in hybrid and full electric models on the market in the UK, with more on the horizon. However, while accounting for one in six car models on sale, SMMT data suggests they make up just one in 13 vehicles currently purchased.
Several dealers, when asked in a recent sentiment survey for Cox Automotive, expressed their view that the market wasn’t ready, citing the high cost of EV, perceived lack of charging infrastructure, perceived issues with range, and time taken to charge. This contrasted with peers, who were more optimistic and positive about vehicles on the market.
In addition, almost a third (30%) of respondents felt OEMs were unprepared for accelerated growth of electric vehicles in the UK, while two fifths (39%) said the same about dealers. While this means that more than half are positive about preparedness, there is still a long way to go to meet ambitious EV targets.
Discover more on this topic
In this series we’re exploring the key trends emerging this year and how dealers can capitalise on them. For a deeper dive into each topic, look no further than our Insight Report 2020.
The report, produced in partnership with Grant Thornton and our associate partners, LexisNexis and NFDA, takes a comprehensive and informed look at some of the biggest trends and topics influencing the automotive industry today.