Electric Car News Roundup – 31

electric car news

Electric And Hybrid Car Sales Jump To 10 Percent Of UK Total

One in 10 new cars sold in the UK in October was a hybrid or electric vehicle, bolstered by sales of battery-powered cars tripling, latest figures show. 

So-called alternatively fuelled vehicles accounted for 9.9 percent of the market, up from 6.9% in the same month a year earlier, as demand for green vehicles climbed against the backdrop of falling overall sales.  

New car sales in Britain fell 6.7 percent last month compared to October 2018, figures from the Society of Motor Manufacturers and Traders released on Tuesday showed.  

Tesla Model 3
The Fast Selling All-Electric Tesla Model 3

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While the bloodbath in the UK automotive sector continues unabated, the sale of electric cars defy the macro trend.  It is true that the ‘absolute’ volumes of the sale of green cars in the UK is relatively small compared to internal combustion engine (ICE) diesel and petrol cars, but it is nevertheless a significant achievement.  New car registrations in October 2019 fell by an astounding 6.7 percent compared to October 2018, while the sales of alternatively fuelled vehicles like battery electric vehicles (BEVs) galloped at a whopping 151.8%.

In fact, in our view, the sales of all-electric cars would have been significantly higher if indeed supply of new models were at higher levels.  There is absolutely no doubt that the demand for eco friendly cars is far in excess of the current production quantities.  Automotive manufacturers have certainly been surprised by the robust demand levels, but it is critical they ramp up the manufacturing volumes at the soonest.  

There are many reasons for the strong performance of electric cars in the UK.  These include:

  • Consumers demand environmentally friendly products.  They have certainly come to the conclusion (finally!) that diesel cars have a terrible impact on the environment, in particular air pollution and do not want to harm their loved ones from the pollution of diesel and petrol cars.
  • Consumers have much greater confidence in the range and performance of the latest EV models.  In fact, ‘range anxiety’ is fast being discarded to history!
  • Consumers want to take advantage of the UK government plug-in car grant (PiCG) incentive to reduce the cost of acquiring a green car. 

We strongly believe that the market share of electric cars will continue to increase rapidly in the immediate term and by the end of 2020, alternatively fuelled cars will continue to lead the UK new registration market.  

Electric Vehicle Demand Could See UK Build A Gigafactory For Batteries ‘Within Three Years’

A surge in the electric vehicle demand within the next three years will require the UK to launch its first full-scale gigafactory for battery production, according to the boss of a research institute backed by the government. 

Neil Morris, chief executive of the Harwell-based Faraday Institution, believes an accelerated demand for electric vehicles through to 2023 means the UK will need to secure investment for a first of its kind 15 GWh gigafactory to ensure a steady supply of batteries in the future.  

EVBox electric vehicle charging
EVBox Electric Vehicle Charging (credit: EVBox)

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Neil Morris is certainly correct in his assertion, in that, it is just not the manufacturing of the electric cars that will scale, but all segments of the value chain will witness a similar expansion.  The most vital component of an electric car is the battery, which in most models is a lithium-ion battery.  Apart from the technological importance of a battery in operating a battery electric vehicle,  an EV battery also contributes to nearly 60% of the cost of an all-electric car. Battery supply and costs will continue to remain significant themes in the adoption of electric vehicles.  If the EV industry successfully delivers on stable and increased battery supply and lower costs, then indeed, the potential of significant mass adoption of zero-emission road transportation fast becomes a reality.  

We certainly support and encourage any deployment of battery manufacturing capability within the UK, however, not convinced if the UK’s higher labour cost base compared to lower cost regions like Asia, will allow the UK to deliver on competitively priced EV batteries.  Despite the level of automation in the manufacturing process, labour costs and other fixed operating costs cannot be removed.  

Is the UK really in a position to competitively supply EV batteries?  This is the million-dollar question that needs to be answered! 

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Ashvin Suri

Ashvin has been involved with the renewables, energy efficiency and infrastructure sectors since 2006. He is passionate about the transition to a low-carbon economy and electric transportation. Ashvin commenced his career in 1994, working with US investment banks in New York. Post his MBA from the London Business School (1996-1998), he continued to work in investment banking at Flemings (London) and JPMorgan (London). His roles included corporate finance advisory, M&A and capital raising. He has been involved across diverse industry sectors, to include engineering, aerospace, oil & gas, airports and automotive across Asia and Europe. In 2010, he co-founded a solar development platform, for large scale ground and roof solar projects to include the UK, Italy, Germany and France. He has also advised on various renewable energy (wind and solar) utility scale projects working with global institutional investors and independent power producers (IPP’s) in the renewable energy sector. He has also advised in key international markets like India, to include advising the TVS Group, a multi-billion dollar industrial and automotive group in India. Ashvin has also advised Indian Energy, an IPP backed by Guggenheim (a US$ 165 billion fund). He has also advised AMIH, a US$ 2 billion, Singapore based group. Ashvin has also worked in the real estate and infrastructure sector, to including working with the Matrix Group (a US$ 4 billion property group in the UK) to launch one of the first few institutional real estate funds for the Indian real estate market. The fund was successfully launched with significant institutional support from the UK/ European markets. He has also advised on water infrastructure, to include advising a Swedish clean technology company in the water sector. He is also a member of the Forbury Investment Network advisory committee. He has also been involved with a number of early stage ventures.

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