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Travel Risk Professionals Over the last 10 years, electric cars have seen a significant rise in popularity and have created a lasting impact on the motor trade.
This is down to a number of reasons, including technological advancements, a growing awareness of environmental issues, costs, and customer preference . Read below to learn more about electric vehicles and their journey so far.
Table of Contents
The Growth of Electric Vehicles in the UK
Early Adoption and Technological Advancements
Electric cars were initially brought to the UK as an alternative for those conscious about the environment or interested in new technology. The Nissan Leaf was introduced in 2011 as one of the first mass-market electric cars. Initial models, like the Leaf, had limited range and higher costs but contributed considerably to raising awareness of the vehicles. Today we have models like the Tesla Model 3, the Renault Zoe, and the Jaguar I-Pace, which can offer a much more accessible option to a bigger audience.
Government Policies and Incentives
In 2018, the UK government announced their Road to Zero strategy, in which they set a goal to achieve net-zero greenhouse gas emissions by 2050. With this, they outlined a plan to phase out the sale of new petrol and diesel cars by 2030 and a complete ban on the new sale of hybrid vehicles by 2035. In order to help reach this goal, they’ve put in place a number of policies and initiatives to incentivise UK citizens to purchase electric vehicles. These initiatives include investment in charging infrastructure, grants for home and workplace chargers, tax incentives and supporting research and development in electric vehicle technology. They even introduced the Plug-in Car Grant in 2011, which provides financial support for purchasing electric vehicles in order to try and alleviate costs for customers.
Market Trends and Customer Attitudes
People’s views on electric cars have changed a lot over time. At first, many were worried about how far they could travel on a single charge, the high cost of buying one, and the lack of places to charge them. These issues made it hard for electric cars to become popular. But as more electric car models came out and charging stations became more common, people’s opinions have started to change. According to the Society of Motor Manufacturers and Traders (SMMT), sales of electric vehicles (EVs) have gone up significantly, especially since 2019. In 2020, electric cars made up 6.6% of all new car sales, and by 2021, this number had increased to 11.6%, showing a clear upward trend.
Efforts to raise public awareness and more media coverage have also helped change how people see electric cars. More people, especially younger ones, are now concerned about the environment and are looking for sustainable options. The idea of electric cars being practical and good for the environment has been strengthened by endorsements from well-known figures and the adoption of EVs by large companies and celebrities.
Additionally, electric vehicles now surpass petrol and diesel cars in performance, offering quicker acceleration, higher energy efficiency, and lower maintenance needs. This leap in capabilities is significantly boosting EV appeal among consumers, aligning with environmental benefits and technological advancements.
Infrastructure Development
Building a network of charging stations is key to the growth of electric cars in the UK. The government and private companies have spent a lot of money to increase the number of charging points across the country. As of 2023, there are over 40,000 public charging points, up from just a few thousand ten years ago. These include fast chargers that can charge an electric car to 80% in about 30 minutes, making long trips easier and reducing charge anxiety
The Electric Vehicle Homecharge Scheme (EVHS) helps people install home charging points by providing grants to cover part of the costs. There are also Workplace Charging Schemes (WCS) that offer similar benefits for businesses, encouraging them to install chargers at workplaces. The goal is to create a wide and easy-to-use charging network that serves people in cities, suburbs, and rural areas. It is also now a legal requirement for all new build homes with a designated parking space to have an EV charging facility.
Private companies like BP Pulse, Shell Recharge, and Tesla’s Supercharger network have played a big role in expanding the charging infrastructure. The partnership between the public and private sectors ensures that the charging network keeps up with the growing number of electric cars on the road.
Economic and Environmental Impacts
The rise of electric cars has had a big impact on both the economy and the environment. Economically, the EV sector has opened new job opportunities in manufacturing, building charging stations, and many other related services. The UK is becoming a leader in electric car technology and production, with big investments from companies like Nissan and Jaguar Land Rover. Projects like the Britishvolt gigafactory, which will make EV batteries, are expected to create thousands of jobs and boost the economy. A number of fuel card companies are also adapting to the rise of electric vehicles. They now offer cards for EV charging stations, electrify work car parks, and provide energy tariffs suitable for EV owners. These efforts support the transition to sustainable transportation and make EVs more attractive to employees and workplaces.
Environmentally, switching to electric cars is key to cutting greenhouse gas emissions and improving air quality. Since transportation is a major source of the UK’s carbon emissions, more electric cars on the road can make a big difference. Electric cars don’t produce exhaust emissions, which helps reduce air pollution in cities—a major health concern. Using renewable energy to generate electricity for these cars further boosts their environmental benefits, making electric vehicles a central part of the UK’s plan to fight climate change.
Challenges and Future Prospects
Despite the positive trends, the growth of electric cars in the UK faces several challenges. The initial cost of buying an electric car, although decreasing, is still higher than that of traditional cars. Building a more extensive and reliable charging network is ongoing, with rural areas still not as well served as cities. Additionally, the increase in electric cars means the electrical grid needs significant upgrades to handle the higher demand and ensure stability.
The alternative renewable energy source of hydrogen could serve as a potential threat for EVs. Hydrogen fuel cell vehicles offer longer range and quicker refuelling than electric vehicles, but high costs and sparse infrastructure limit their current viability. EVs, with a robust charging network and more affordable technology, dominate the market. Both aim for greener transport, yet EVs lead due to practicality and consumer preference, despite hydrogen’s potential. Ultimately, EVs are the more accessible choice in the transition to sustainable transportation.
Looking ahead, the UK’s plan to ban the sale of new petrol and diesel vehicles by 2030 sets a clear goal for the future. Continued government support, technological advancements, and consumer acceptance will be crucial in meeting this target. Innovations in battery technology promise to further improve the range, cost, and charging times of electric cars. Moreover, the use of smart grid technology and vehicle-to-grid (V2G) systems could make the electrical grid more efficient and sustainable by using electric cars as part of the energy network.
How are Electric Vehicles Impacting the Motor Trade?
1. Shift in Sales Trends
The rise in electric car sales is changing the motor trade industry significantly. As the general public become more concerned about the environment and sustainability, the demand for electric vehicles has increased. Car dealerships are seeing more interest and sales in EVs, which means they have to change their sales strategies and stock to meet this demand and car manufacturers are adding more electric models to their lineups, with many halting the production of petrol and diesel cars entirely.
This shift shows that people now prefer cleaner and more efficient transport options. The boost in EV sales is also pushing innovation in how cars are sold, with more focus on online sales and direct-to-consumer models like those used by Tesla. This change means that dealers, manufacturers, and everyone involved in the motor trade need to be flexible and quick to adapt, so they can take advantage of the growing EV market and meet the needs of environmentally conscious customers.
2. Training
The increased popularity of electric vehicles is pushing motor trade businesses to focus heavily on training their staff. Since EVs are different from traditional cars, employees need to understand the basics of how these cars work, including their batteries, motors, and charging systems. This training also helps salespeople explain the benefits and features of EVs to potential buyers, answering common questions about things like driving range and where to charge the car. Mechanics also need special training to safely maintain and repair these vehicles, as they involve different tools and safety procedures compared to regular cars.
Investing in this kind of training is crucial for building trust with customers and helping them feel confident about buying an electric vehicle. As more people become interested in EVs, businesses in the motor trade that prioritise staff training will be better equipped to meet this growing demand and ensure their success in the changing car market.
3. Changes in Service and Maintenance
Electric vehicles are changing how car maintenance and repairs are done. Unlike regular cars, EVs have fewer parts that can wear out or break, which means they need less frequent servicing. Things like oil changes, spark plug replacements, and timing belt adjustments, which are common for traditional cars, are not needed for EVs. So although some specialised parts, such as tyres, can be more expensive, this means fewer visits to the service shop and potentially lower maintenance costs overall for owners. For car dealerships, this shift means a decrease in some of their usual service tasks and revenue.
However, it also brings new opportunities. Garages can focus on other important areas for EVs, like checking the health of the battery, updating the car’s software, and diagnosing electrical issues. Mechanics need new skills and training to handle these tasks and meet the needs of EV owners. There’s also a growing need to educate customers on how to care for their EVs.
4. Investment in Charging Points
Electric vehicles are prompting car dealers and garages to invest more in charging infrastructure. They’re setting up charging points at their locations to better serve EV owners. This move not only makes life easier for current EV drivers but also attracts potential buyers by showing that the dealership supports EV technology. Having charging points onsite improves the customer experience, allowing EV owners to charge while they shop for a new car or wait for maintenance. Some dealers may even offer paid charging services as an extra revenue stream.
As the demand for EVs grow, having convenient charging points available becomes increasingly important. By getting ahead and installing charging points now, motor traders are preparing for a future where electric cars are the norm, ensuring they can meet the needs of their customers and stay competitive in the evolving industry.
5. Supply Chain Changes
The increase in electric vehicles is changing how cars are made. Car manufacturers and suppliers are adapting to produce more EV parts like batteries and motors. This means they have to invest in new equipment and change how their factories work to make more of these parts. Suppliers are also finding ways to make these parts more efficiently and at a lower cost. To keep up with demand, car manufacturers are working closely with suppliers to make sure they have everything they need to build EVs. This includes making sure they can get enough of the materials, like lithium and cobalt, that are used to make EV batteries.
As more people choose EVs, the whole process of making cars is evolving to support this shift towards electric vehicles. This change brings both challenges and opportunities for everyone involved in making cars.
6. Technology Improvements
One major area of progress is in battery technology, where experts are working to make batteries that last longer, charge faster, and cost less. These improvements are making EVs more efficient and affordable, while also allowing them to travel further on a single charge.
As more charging points pop up around the UK, there’s a need for faster and easier ways to charge EVs. That’s where innovations like wireless charging come in, offering drivers a convenient way to charge their vehicles without plugging them in. These advancements aren’t just making EVs better, they’re also driving progress in other areas like energy storage, shaping the future of how we get around.
One example is Octopus Energy offering the Octopus Power Pack, a Vehicle-to-Grid (V2G) tariff. EV owners can charge their cars for free by selling electricity back to the grid during peak demand and recharging when it’s cheaper. This innovative approach optimises energy use and benefits both consumers and the grid. Another example is Tesla’s Supercharger network, a fast-charging solution for electric vehicles, with thousands of stations globally. It offers rapid charging, convenience for long-distance travel, and is expanding to support various EVs.
7. Environmental Regulations
The increased popularity of electric vehicles is partly due to stricter rules on pollution and emissions set by the government. These regulations are pushing car manufacturers to speed up their transition to EVs. Unlike traditional cars, EVs don’t produce any emissions from their exhausts, making them a better fit for these rules. To meet the demand, car manufacturers are putting more effort into making better EVs. They’re focusing on improving things like batteries, electric motors, and how the cars are designed to make them more efficient and environmentally friendly.
Plus, the government is offering incentives like tax savings to encourage people to buy EVs instead of regular cars. This shift is reshaping the motor trade industry, with companies investing more in EVs and the technology needed to make them. As the rules around emissions get stricter, we can expect to see even more changes and improvements in the world of electric vehicles.
8. Marketing Strategies
As electric vehicles become more popular, garages and car dealers are changing how they advertise them. They’re focusing on the money saving aspects, like how EV owners can spend less on fuel and maintenance compared to regular cars. EV ads also talk about how they’re better for the environment since they don’t produce any pollution from their exhausts, which is important for fighting climate change and keeping the air clean.
Another thing they highlight is all the features EVs have, like being able to brake to recharge the battery and how fast they can accelerate. These features make driving an EV more fun, especially for people who like new tech. They are also using social media to reach more people and get them interested in EVs.
By focusing on these benefits in their ads, car manufacturers and dealers are making EVs look like a smart choice for anyone looking to buy a car, which is helping more people make the switch to electric vehicles.
9. Economic Impacts
The switch to electric vehicles isn’t just changing how cars are made it’s also affecting the economy in different ways. On one hand, it’s creating new jobs in the EV industry. Companies need workers to build EVs, make batteries, and other parts for electric cars. But at the same time, there are fewer jobs in making regular cars because more people are choosing EVs. However, the rise of EVs is also creating new opportunities in the renewable energy sector. As more EVs are used, there’s a greater need for clean energy sources like solar and wind power. This leads to more jobs in making and installing renewable energy systems, which helps the economy and the environment.
10. Manufacturer Partnerships
With electric vehicles becoming more popular, car manufacturers are teaming up to work together on developing new EV technologies. By joining forces, they can share their knowledge and resources, which helps them save money and make progress more quickly. These partnerships allow car manufacturers to bring new EV models to the market faster and make them better. These partnerships are really important for making electric vehicles more widespread and better for the environment.
11. Increased Insurance Premiums
The rise of electric vehicles is also impacting motor trade insurance premiums. The average cost of motor trade insurance has seen a significant increase, partly due to the higher costs associated with EVs. Some of the contributing factors include repair costs and claims costs. EVs are approximately 25% more expensive to repair than their petrol equivalents and take 14% longer to fix. Plus he motor trade insurance industry is paying out more in claims and costs than it is collecting in premiums, with payouts for EVs being 25.5% more expensive compared to petrol and diesel vehicles. As a result, motor trade insurance premiums have continued to rise, with the average price paid for motor trade insurance up by 12% in the last quarter.
Key Takeaways
The rise of EVs in the UK has brought many changes to the motor trade industry.
Over the past decade, improved technology, government support, and changing consumer attitudes have made EVs a much more popular choice, and many initial concerns, such as limited driving range, high costs, and charging issues, have improved significantly.
However, this means motor traders are having to adapt to new trends and circumstances. There are significant changes within the market and consumer attitudes that are impacting how car dealerships sell and advertise vehicles. Garages are having to adjust their staff training to include the servicing and maintenance of EVs, and supply chains are evolving to produce more EV parts, impacting repair garages.
Overall, the UK’s aim to ban new petrol and diesel cars by 2030 is pushing a major transformation within the motor trade industry and it’s crucial that motor traders stay up to date with how this may impact them and their business.
