UK Electric Vehicle Market Analysis

This study analyzes the current popularity of electric vehicles in the UK, government initiatives to promote zero-emission road transport, corporate support for EVs, and future prospects. The analysis reveals a promising market for EVs in the UK, with government policies and corporate support driving growth. The study also highlights the need for increased charging infrastructure to support the adoption of EVs.

Research Report
on the popularity
of Electric vehicles in UK
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Contents
Introduction:............................................................................................................... 3
Description:................................................................................................................ 3
Methodology............................................................................................................... 4
Summary of Literature and Data:...............................................................................5
Factors that will drive the growth of EV Market:.........................................................8
Conclusion:................................................................................................................. 9
References............................................................................................................... 10
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Introduction:
The electric car market is having a very fast growth in the world, especially in the European
zone. In September 2020, the Plug-in Hybrid Electric vehicles (PHEVs) in the UK saw a 184%
increase in registration from the same period last year (Lilly, 2020). Usage of electric cars has
become far more rapid because of the government’s plans to end the sale of petrol and diesel cars
within 2030. The UK government is working hand-in-hand with the Committee on Climate
Change (CCC), which predicted that the market for electric vehicles will be 100% by 2035. This
report aims at finding the popularity of Electric Vehicles (EV) in UK and the possible reasons
behind it. It will explore different sources, like- government reports, articles, journals and news
to find out the recent trend of electric vehicle usage and its future.
The objectives are:
1. to analyse the current UK Electric Vehicle market
2. to identify recent trends and patterns of EV market
3. to analyse the characteristics of people using EV
4. to find out the government’s incentives to more usage of EVs
The overall research will be focused to find the future of Electric Vehicles in UK.
Description:
As the study focuses on the popularity of Electric Vehicles (EV) and their prospects, a clear
identification of them is required. EVs are also known as ULEVS, which means Ultra Low
Emission Vehicles that emit less than 75 gram of CO2 when travelling for 1km. These vehicles
generally run on electricity all time. According to the UK Parliamentary Office of Science &
Technology (POST), there are 4 different categories of Electric Vehicles:
1. All-Electric EV: Here the only power source is battery, which helps to run the vehicle
from a range of 80- 120 miles or 130- 190 kilometres.
2. Plug-in Hybrids (PHEVs): They can switch the power source between electricity and
fossil fuels. As they have a smaller battery, their range is between 10- 40 miles only.
PHEVs and all-electric EVs are charged by plugging them into electricity grids.
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3. Hybrids (HEVs): HEVs are not charged by plugging in, rather they are recharged when
running, which enables them to run for a few kilometres in electric mode.
4. Fuel-Cell Vehicles: Fuels, such as Hydrogen helps these cars to generate their own
electricity. Plugging in is not required in these vehicles as refuelling is done just like
petrol cars.
Of all these types, all-electric EV’s holds the largest market share. But the analyses propose
further elaboration. Since 2012, EV usage by UK people has maintained an upward trend. In
2019, the global market of EV was USD 273. 22 billion which is projected to increase to USD
985. 72 billion within 2027 (Fortune Business Insights.com, 2021).
As the global market seems to be rising day by day, UK is no different. Several factors are acting
behind people’s move to buying new EVs. This report will analyse those based on secondary
data collected from several reports published by UK governments, news reports from renowned
newspapers, business journals etc. Graphs, charts and tables derived from these sources will help
show the current scenario as well as the prospects.
Methodology
The focus of this report is to identify the popularity of electronic vehicles and the UK and the
prospect of EVs in the future. Reducing carbon emission is a goal for the UK government just
like other developed and developing nations in the world. By 2030, the government hopes to
have 70% of new car sales to be ultra-low emission cars. This target has influenced to prepare
this report.
Deriving data is a crucial job for this research. Google has been used to run the secondary data
research. Numerical data came from different government publications. 10 years of data have
been used to put light on the research. The market share of EV manufacturers in the world, the
recent usage of EVs in the UK, current and projected market trends and user characteristics have
been analysed based on the research papers, journals and reports. Information related to other
countries’ EV usage has been excluded and data older than 10years has not been taken into
account.
To find out the popularity of EV buying, some questions, such as- users’ financial capability,
awareness, buying patterns and government initiatives have been asked.
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Summary of Literature and Data:
Of all the types of vehicles being used, electronic vehicles or ULEVs represent only a small
portion. The chart below shows the licensed vehicle numbers from Q1 2010 to Q2 2020.
Figure 01: Number of Licensed Ultra-low Emission Vehicles
Source: Smmt.com.U.K, 2021
This chart points out that the number of ULEV vehicles has increased from 9000 units to
317,000 units from Q1 2010 to Q2 2020. It is an increase of 3,427%. Though it is a great
increase in respect to the previous buying, as a proportion of the total licensed vehicles of UK,
they have a very small share. In 2019, the percentage of licensed petrol cars was 58.5%, when
diesel cars were 39.1% of the market (Hirst, 2020). Only 0.8% of the total cars were either
battery-electric, hybrid, or fuel-cell electric cars.
Though the percentage is very low in respect to petrol or diesel-run cars, the number of
registered EVs is significantly increasing in the UK. At the end of Q2 2020, newly registered
EVs accounted for 10.9% of the total registered cars. In 2019, the share was 2.2% only. It shows
the fact that the buying pattern of people is changing and moving more towards ULEVs.
Figures published by SMMT or Society of Motor Manufacturers and Traders show the trend
clearly. The below chart shows the increase of EV registrations in the UK from 2011 to 2019
with respect to all types of EVs.
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Figure 2: Cumulative UK Electric Vehicles Registration
Source: Smmt.com.uk, 2021
The chart shows that Plug-in cars hold the biggest shares of the total car registration.
User type and preferences:
Currently, most of the private EVs are middle-aged, well- educated, male and financially affluent
people. They are mostly well established and already have at least one car in their households.
All of the EV owners share common characteristics by either desire to save energy and money or
active interest in updated technology. Of all the players in the market, Tesla holds the leading
position amongst all with around 31% market share (Shahan, 2020), This company grabbed this
position by selling Tesla Model 3.
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Figure 3: Best Selling Electronic Vehicles in the UK (January 2020- June 2020)
Source: Holland, 2020
The chart shows that the most popular of them all are Tesla Model 3, Nissan Leaf, Jaguar I-Pace
and Renault Zoe. They seem to be the most popular BEVs sold during the first six months of the
year over 2,000 units. BMW 330e and Mitsubishi Otlander stood out as the best- selling plug-in
hybrid cars (PHEVs).
Future trend in electric car usage
As per the analysis of Delloitte Insights (2020), BEVs will hold 81% (25.3 million) of the new
global sale of electronic vehicles by 2030, when PHEVs will hold the rest (5.8 million). The
global electric vehicle forecast of them shows that total EV sales will grow from 2.5 million to
11.2 million from 2020 to 2025. The annual car sales will take time as to 2024 to reach the pre-
COVID- 19 period. China is expected to achieve 48% of the domestic market share within 2030,
when Europe should achieve 42%. The following figure shows the expected market share of
electronic vehicle by region:
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Figure 4: Estimated Electronic Vehicle Market Share by Major Region
Source: Delloitt.com, 2020
From the graph, it can be seen that the EV market share in Europe will be increasing, which also
predicts higher sales in the UK market.
Factors that will drive the growth of EV Market:
The long term prospect of EV is strong despite CoVID- 19 pandemic. The changing customer
sentiment towards low carbon emission, government legislations and the role of big corporations
will shape the market of EV in the future. All these factors are described shortly here:
1. Changing Sentiments of the Customers:
As the barriers to buying and maintain EVs are reduced significantly, customers are more willing
to buy new EV cars. The consumer of the UK was more positive towards EV vehicles in 2018
than 2020. In 2018, they gave positive feedback regarding cost, the time needed to charge,
driving range and safety concerns, etc.( Deloitte Global Auto Consumer Study, 2020) The only
significant problem pointed by them was the lack of eeV charging infrastructure. Above all, the
result was positive.
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2. Policy and Legislation:
The Uk government announced the 'Road to Zero Strategy' in 2018 to promote the change to
zero emissions from road transport.. It has taken these notable measures (gov. uk, 2018):
 Within 2030, at least 50% and at best 70% of the new cars sold will be ULEVs
 Newly built homes will be pushed to include charge-points to ensure an easy charging
system.
 £400 million charging infrastructure funds to help accelerate the companies that deal with
produce and install charging points.
 Electric Vehicle Homecharge Scheme- a scheme for the EV owners to put a charging
socket at their home for £500 only.
3. Role of Big Corporations:
The support by big corporations is creating a big impact on the sales of EVs. As most companies
want to differentiate themselves by creating a positive impact in the world, carbon emission is
one of their most important concerns. For this, they are focusing on the increased use of EVs. By
2021, corporates will account for 61% of the total car sales in the Western Europe region.
These are the most important factors to drive growth in the UK EV market.
Conclusion:
This study aimed at analysing the current popularity of electronic vehicles in the UK as well as
the future prospects of these vehicles. And after the analysis, it can be said that the market of EV
in the UK is very promising as people are being more interested in buying EV cars. Additionally,
the government is working hard to reduce petrol and diesel-run cars within 2030, and so has
introduced different policies and legislations. The sources used for the analysis purpose have
proved to be very useful to draw conclusion.
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References
Delloitt.com, 2020, Electric vehicles: Setting a course for 2030,
https://www2.deloitte.com/uk/en/insights/focus/future-of-mobility/electric-vehicle-trends-
2030.html, [Accessed 10 February, 2020].
Department for Transport, Vehicle Licensing Statistics: table VEH0203
https://www.gov.uk/government/statistical-data-sets/veh02-licensed-cars5[Accessed 10
February, 2020].
Gov.uk, 2018, Reducing emissions from road transport: Road to Zero Strategy,
https://www.gov.uk/government/publications/reducing-emissions-from-road-transport-road-to-
zero-strategy [Accessed 10 February, 2020].
Hirst, D, 2020, ‘Electric vehicles and infrastructure’, BRIEFING PAPER Number CBP07480,
www.parliament.uk/commons-library | intranet.parliament.uk/commons-library |
[e-mail] | @commonslibrary
Holland, M, 2020, Tesla Model 3 = 31% of UK Electric Vehicle Sales ,
https://cleantechnica.com/2020/12/26/tesla-model-3-31-of-uk-electric-vehicle-sales/ [Accessed
10 February, 2020].
Shahan, Z, 2020, UK In August — 9.75% Electric Vehicle Market Share, More Than 2× August
2019, https://cleantechnica.com/2020/09/05/uk-in-august-9-75-electric-vehicle-market-share-
more-than-2x-year-on-year/ [Accessed 10 February, 2020].
Smmt.com.uk, 2021, Electric Vehicle and Alternatively Fuelled Vehicle Registrations,
https://www.smmt.co.uk/vehicle-data/evs-and-afvs-registrations/, [Accessed 10 February, 2020].
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