Used EV market grows 119% in 2021
The latest news from the world of EVs
Hello and welcome back to The Fast Charge, a British EV newsletter.
In today’s edition… a new home chargepoint subscription, £200 per year price increase for EV drivers, and I ponder the biggest challenge for the UK’s automotive goals (clue: it ain’t infrastructure).
If you have any questions or comments, please do contact me at email@example.com.
In the last week…
CHARGING FORWARD: In the latest release by the Society of Motor Manufacturers and Traders (SMMT), it’s revealed that in January around one in five cars registered was a plug-in. As said previously, evidently 2022 is going to be just as crazy for EV record-busting as 2021. Read more. SMMT have also this morning published their latest figures for used car transactions, I cover these in my longer story below.
PRICE RISES: As the energy crisis continues to bite, and Ofgem increases its price cap, every EV owner who currently charges at home needs to be checking their current tariff rate. Many of those could end up with sizeable extra bills as the rates increase. According to Fiona Howarth, CEO of Octopus Electric Vehicles, “A typical driver on a standard variable tariff might see their costs increase by just over £16 a month.” This could mean an additional £200 per year. However, Howarth does also point out that this is still cheaper than running a petrol/diesel. The RAC also warned drivers about the rising prices, however, they went further suggesting that price rises for public charging are to be expected too. Joy! Read more.
LEVEL UP: As many may have seen, last week saw the exciting publication of the government’s levelling up white paper. Its aim is to boost living standards (especially life expectancy) in the regions. A key pillar of the 400-page white paper was about investing to improve public transport. Not necessarily investing in the monetary sense – as the government doesn’t have much of that – but certainly in the sense of devolving powers to regions and creating new programmes. One key part of the transport plan is to increase digital connectivity and to get people more active. You can read a summary of the plan on GOV.UK.
CRACKING EGG: Interesting news this morning, a new home chargepoint service has been launched by the big business Liberty Global. The service in question is called ‘Egg’ and is essentially a subscription model, but for chargepoints. A bit like Onto where you get a car, with Egg you receive a chargepoint for a small monthly fee. It’s the first of its kind in the UK. They’ve introduced this ahead of the home charger grant ending plus due to the high prices for installing devices. Costs start at £30 per month for a chargepoint (covering installation and maintenance). You can also cancel at any time. It’s a nifty idea, but I do wonder if using services like Klarna might be better to get yourself a chargepoint installed - at least that way you own the device and add value to your home. Check it out here.
ALEXA, DRIVE: Interesting news from Jaguar Land Rover. It seems they have come to a deal with Amazon to install the voice assistant, Alexa, into all their vehicles. This is good news for anyone that has tried to use some of the manufacturer-built voice aids before. However, if it’s anything like my Alexa, no doubt it will urgently flash up on the motorway and ask about my recent shopping experience for dehumidifiers. Read more.
WIND WARNING: It's been very windy over the last few days, hope nobody reading has been as unlucky as the owner of this Tesla I spotted on Sunday. Ouchhhh.
FRUGAL FORD: During their recent full-year financial update, the CEO of Ford, Jim Farley, explained to investors how the company has launched a task force dedicated to lowering the cost of materials to build its EVs. He said looking at this topic now, rather than wait for better efficiency or material costs lowering, will create better margins overall. It seems to be working. Farley explained, “For example, on the Mustang Mach-E in just the last month, our team found $1,000 of opportunity per vehicle, and that’s deliberate through design simplification, vertical integration and leveraging our scale with supply chain as we ramp up production.” And that’s in just one month! Hopefully, this radical rethinking will soon spread to other carmakers, if it hasn’t already. Read more.
Y U HERE: The highly anticipated Tesla Model Y is set to arrive on British roads on the 19th of February. It seems those who bought one at the end of last year are being invited to pick them up from Southampton. It’s rare for Tesla to do publicity stunts like this in the UK, but I suspect the occasion will certainly mark a new tide for Tesla in this country. It’s widely accepted that the Model Y will soon become the most popular model in the EV (and perhaps the whole automotive) market. Top Gear just completed an in-depth review of the Model Y that I thought was pretty good.
LOOKING AHEAD: This Sunday in America land will be the Super Bowl. And what this means is lots of auto companies will be running adverts about their EVs. According to the Drum, Kia, Nissan, BMW and General Motors have slots. GM had an amusing ad last year featuring Will Ferrell and Norway. This year, GM looks set again to use comedy to get their EV message across the US viewers. This week they revealed a teaser trailer for their advert featuring Mike Myers reviving his role as ‘Dr EV-il’. You can watch it below. And I’m going to say now… if the EV they advertise doesn’t involve sharks with frickin’ laser beams attached to their frickin’ heads, I will be disappointed.
The second-hand comet is coming, how will the UK act?
“I’m sorry to be writing this, but tonight I find myself all but decided to return to ICE,” wrote a user on the popular forum SpeakEV yesterday. “I’ve really tried to make it work but I can honestly say there isn’t a single long-range trip when I don’t have issues and I see nothing tangible on the horizon to make it better.”
This isn’t the first time an all-electric owner has given up on EVs and it won’t be the last. However, what was interesting about this post was the number of people who also commented with a great deal of support. And there’s a good reason why.
Whereas 2 years ago the entire EV world was in its infancy to the outer world, nowadays you can’t move for TV adverts, billboards, social media posts or a neighbour who has an electric car.
Though this is a great thing for the strides being taken for cleaner and greener living, for owners public infrastructure remains a constant bugbear.
From millions of different apps, varying prices, payment methods and reliability problems; it can still prove to be a faff doing the right thing.
The good news is the vast majority of people charge at home. And, for public charging, later this month the government will publish its EV Infrastructure Strategy. This should set much tougher rules for chargepoint operators. Whether it proves too much though – aka, will operators have an incentive to keep to such high standards for very small profits – remain to be seen. However, it’s quite evident that the charging landscape is moving in the right direction.
But what about the cars?
EV’s are brilliant things. Some of the models being released today are astoundingly good looking, exciting and full of enough technology to frighten 10 cavemen. But, they remain a bit expensive.
While it’s estimated by 2027 we’ll see price parity, meaning new EV’s will cost the same or lower than their fossil fuel sipping counterparts, that ignores the millions of people that will need to rely on a second-hand market sooner. And, as it stands, that market remains pretty vacant for EVs.
The demand is evidently there, though. In the most recent used car figures available from the Society of Motor Manufacturers and Traders, they said in 2021 some 40,228 all-electric cars changed hands – that’s an increase of 119% compared to 2020.
That sounds impressive, but it’s still only 0.5% of all used car transactions last year – 97% of the rest belonged to petrol and diesel, meanwhile, hybrids and plug-ins took around 2.5%.
It’s certainly not a surprise, EVs will probably take a while to really unload into the second-hand market given it’s only really in the last 12 months that they’ve taken off. Likewise, the continued chip shortage has pushed up second-hand vehicle prices across the board - as new cars are harder to come by.
But, like the comet in the Netflix drama ‘Don’t Look Up’, if we ignore this problem now it could wreak havoc with our clean goals later. And in some places, the comet has already entered the sight of politicians.
Only in the last week, Greater Manchester, a city due to open its Clean Air Zone in May, delayed its launch until July due to the high prices and availability of used clean vehicles putting many people out of reach of complying. This delay was agreed upon following engagement with the government.
The government itself, despite championing clean air and the rise of EVs at every stage, also put distance between itself and the planned zone.
“They're good in the sense that you need ways of reducing emissions,” explained the Prime Minister last Thursday, “but if you're going to do something like a Clean Air Zone, you've got to time it right.”
Boris added, “You can't put it in, in a way that is going to crush business - particularly small business - making it impossible for people to use their vans, for white vans to be able to get into the town or city centre. And you can't penalise people in such a way to do serious economic harm.”
It’s a revealing attitude from the top office. Yes, on the face of it this delay seems to only be for a few months. But, what it says to me is: these deadlines can and will move about if the political pressure is there. And evidently, the pressure is already here.
Looking to the future…
Naturally, the government has made a big play for electrics in the UK and we can’t forget that manufacturers are investing billions based on the deadlines set out. However, most people tend to vote with their wallets. The government knows this very well, which is why only on Friday the Chancellor announced support for the ‘cost of living’ crisis, and why the incoming tax rises are mired in controversy.
For me, looking at the world of EVs, the big question that needs answering is whether enough people are going to buy EVs and then give them up again by the time 2030 comes knocking? And will the price of those cars be low enough for ordinary incomes?
My inkling is there will be cars available, but I worry that popular EVs like the Tesla Model 3 will always remain quite pricey. If that’s the case, perhaps the choice will be either to fund a new grant or create a trade-in scheme to ease the gap. Or to just delay the introduction entirely. One thing is for sure after this week’s Manchester decision, and that’s neither Labour nor the Conservatives will want to be seen forcing people to spend money they don’t have.
By Tom Riley