According to Alfonso Martinez, Managing Director, LeasePlan UK, the disparity in prices between internal combustion engine (ICE) petrol/ diesel cars and plug-in electric vehicles has narrowed, with the United Kingdom as the ‘second most cost-effective’ nation in Europe to own an EV.
He further states “This year’s Car Cost Index has shown that electric vehicles are increasingly becoming a rival option to traditionally fuelled vehicles, as costs are continuing to fall and legislation, such as the Company Car Tax announcement from July, is now actively encouraging drivers to look for electric alternatives.”
Though we do not have a detailed understanding of the analysis conducted by LeasePlan UK, we accept the general assertion that the disparity in prices between electric vehicles and internal combustion engine vehicles has narrowed.
But this is not surprising. Look at the growth of any industry over the past 100 years, and it will be clearly evident, that as the industry gains scale and maturity, the prices fall. The semiconductor industry is an excellent example of the strong correlation between economies of scale and lower pricing. But even if we look at the last decade, the renewable energy industry has demonstrated very successfully the same concept. In the case of renewable energy, in particular, solar energy, the cost of ‘silicon’ was the predominant issue. However, overtime, the price of silicon dropped significantly, such that ‘solar grid parity‘ became a reality. The electric vehicle industry shares similar themes with the renewable energy industry. In the case of electric vehicles, the largest contributor to an electric vehicle cost is the EV battery (up to 60%). However, as the EV industry has developed over the past few years, we have witnessed improved performance and lower costs of batteries. This trend will continue over the next few years, tracking very closely the adoption/ scale of EV deployment.
In our view, it is not ‘if’ but ‘when’ electric cars will become cheaper than petrol or diesel cars. We expect this to be in the near future, and hope within the next 3 to 5 years, if not sooner.
BMW, the German automotive company has announced it will not renew the BMWi3 pure electric car. The company will instead put its efforts on the electrification of its current portfolio of cars i.e. make EV more mainstream in its business. However, the company will continue to build the i3. “There’s no specific plan for an i3 successor” according to Pieter Nota, BMW Sales and Marketing Chief.
Though at first impression it may seem surprising not to continue with the success of the ubiquitous BMW i3, we believe in the long term, the strategy to focus on the main stream electrification of the BMW portfolio will pay dividends. BMW is already in a strong position to leverage all its experience and knowledge from the development, production and sales of the BMW i3. The ability to leverage this ‘competitive advantage’ to its maximum will help define its success into mainstream electrification. The German manufacturer is also correct to continue to manufacturer the BMWi3. There is absolutely every reason to continue to exploit the success of the BMWi3 battery electric vehicle (BEV).
The U.K. government has been assessing the energy market and its policies over the past year. Some officials have suggested ‘new incentives’ to further promote the adoption of electric vehicles in the United Kingdom. In particular, given the backdrop of eliminating greenhouse gas emissions by 2050. One of the potential incentives could be manufacturers offering EV customers free charging.
We at e-zoomed, certainly welcome more incentives for encouraging the adoption of electric vehicles in the U.K. In particular, given the revision of the plug-in car grant (PiCG) earlier this year. The current pricing of electric cars has been an issue that has concerned potential buyers, and any step in alleviating the ‘acquisition or running cost’ of EVs, will be critical in successfully migration from polluting diesel and petrol cars to zero-emission all-electric cars. We look forward to receiving confirmation of new incentives for the EV sector!
We at e-zoomed are more than happy to assist you with all your EV needs to include:
- Securing for you the perfect electric car
- Affordable electric car finance
- Well-priced electric car insurance
- Competitive EV breakdown cover
- Attractive green energy EV tariffs
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