Is the UK EV market hitting a bump in the road?

On the backdrop of the House of Lords report on EV sales, which showed a 25% sales decrease in Jan 2024 compared to Jan 2023, one might be quick to assume that this is showing an alarming decline or a slump in the EV scene here in the UK, but is that really the case?

In reality, there are many factors that go into determining a statistic that on the face of things seems flat, and instead, the picture is more complex. Whitaker is actually a part of the camp which is seeing things in a more positive light.

What’s going on in the current EV market?

Currently, sales are down in the UK EV market, but that isn’t to say that the overall picture is stagnating or in decline. “I’m not sure I’d say they have slowed,” says Whitaker. “Rather the rate of increase has been reduced.

“Year-on-year plug-in vehicle market share for new sales is still increasing, but these past 2 months have seen the normal annual slow-down before the ‘new model year’ in March, and EV proportion Jan/Feb this year is still up from the comparable months last year,” he explains. This is the natural flow of the market, whilst it may be a touch extreme, so are the circumstances here in the UK compared to last. One only has to look at the current economic situation the nation is wading through for a big indicator as to why expensive sales of cars, in general, are down.

Not all is glum in the UK EV market however, “Thankfully the second-hand EV prices are now looking more like normal depreciation curves, which means we’ll start seeing a more reasonable offering to the vast majority of drivers that always have used cars (over 80% of vehicle purchases are used cars). We also have seen company car BIK (benefit in kind) incentives drive a greater EV share of company cars, fleets of which are ending their leases and starting to flood into the used market, improving the supply too. I think that these effects are going to make EVs more widespread and more understood by the wider market, not just for early adopters which are the minority that buy new cars,” comments Whitaker.

There are also driving factors outside of the EV market’s control which are affecting current sales figures. As previously mentioned, the current economy of the UK isn’t great for new car sales, nor are the current popular car trends. “The poor state of the economy and higher interest rates certainly won’t improve new car sales, and I believe the marketing of larger, more expensive SUVs isn’t helpful as it’s got too many people over-extended financially on vehicles that are unnecessary for normal urban use. SUVs are proportionally worse for the environment and for road safety, not only are they 8x worse for pedestrians and road users outside of the vehicle, but are also less safe for people inside the vehicle too, compared with sedan and estate vehicles,” expands Whitaker.

Whilst the situation isn’t as dire as the flat market sales decrease suggests, it certainly is seeing a decline, so what should be done?

What can be done to help the market?

“For EVs to continue to gain adoption, especially as we move beyond the early adoption, the market will need to take a combination of combatting the proxy-culture war against progress and making environmental improvements that are saturating some news arenas with negative and misleading content,” says Whitaker. “We need to also ensure that charging infrastructure growth matches the demand increase as EVs gain popularity.” Addressing these challenges is key to transitioning towards a sustainable automotive future that aligns with consumer preferences and environmental objectives.

There is also a role to be played by the government in all of this, after all, it is them who can invest in the EV sector, encourage adoption, and support charging infrastructure. This is something Whitaker adheres to: “Some things will take investment [from the government], such as deploying destination charging infrastructure and speeding up grid upgrades required for fast chargers. Thankfully other things don’t need investment, just legislation and permission.

“Aspects that don’t require central funding include simplifying the permits for EV infrastructure construction. Especially privately funded infrastructure such as domestic chargers, and of course: cross-pavement charging channels that open domestic charging convenience and price to more homes.”

Charging infrastructure at the heart of problems

At the core of concerns within the UK EV market is charging infrastructure, both public and private. Within the current forecasts in EV adoption, it is simply not practical to rely on a supply of public charging infrastructure, and on the private side of things we are only falling behind in the UK.

Whitaker is a big advocate for these concerns, as he explains in depth: “Residential areas are the main place we want drivers to switch to EVs and reduce pollution, but it’s the residential drivers that get the worst experience from current EV ownership, thanks to 60% of urban homes not having a driveway, and safety rules preventing them trailing a cable from their home to the vehicle. Currently, most councils only support ‘public charger’ strategies for these homeowners, such as lamp posts, which you not only have to drive further from home to access, but they also have a 5x to 10x higher cost of charging compared to domestic chargers.

“Nearly 40% of drivers surveyed by IPSOS (and 54% of London drivers) said that they would switch to EV if they could charge at home rather than having to rely on public chargers, so this is clearly the main issue slowing EV adoption in cities.

“Some homeowners are applying to convert front yards (if they are large enough) into driveways, but not only does this ‘paving paradise’ make pavements more unpleasant for pedestrians if there are dropped kerbs every 5 meters, it reduces trees and SUDS/runoff for rain, increasing flooding, and reduces parking availability, so it really isn’t an attractive direction.

“Also, public chargers, especially fast chargers are more likely to use peak electricity when compared to domestic chargers, which have smart EV tariffs that encourage off-peak and excess renewable charging such as during solar excess in the middle of the day or excess wind during the night.

“This is why we very much believe that for the EV transition to continue at pace, we need the vast majority of normal everyday domestic driving to be powered by off-peak domestic charging, and only the occasional long journey away from home requiring the higher prices and peak-time electricity at a public charger.”

Without addressing these problems, the EV market cannot continue to grow at pace. Whitaker and his team have even noticed in conversations with consumers that they would only consider an EV if home charging was available, or even that those with an early BEV ended up swapping it out for a PHEV or regular car due to the inconvenience of being tied to public charging.

Whitaker strongly believes that “public fast chargers should be the charger of last resort,” not the default option. “The switch to a more renewable and sustainable electric economy for heating and driving will require some grid upgrades and changes to infrastructure, but we make that change far easier if we can get the vast majority of driving domestically charged using excess renewables, and that will only happen if these vehicles are plugged in for long periods so that smart EV tariffs can pump in the excess at the right times. By doing so we reduce the grid upgrades needed and reduce the requirement for battery storage to smooth out demand, as demand from heat pumps and domestic EV charging can be moved and flexed.

If cities try to supply only public charging, it will result in more street furniture, dedicated charging bays, less parking overall, and more wasted miles with people driving around to find a bay, just like New York parking. We really would benefit from getting most people onto domestic charging, and by doing so we will accelerate EV sales and adoption some more!”

Final thoughts

As we conclude our exploration of the current scenario in the UK's electric vehicle (EV) market, a detailed examination reveals a landscape filled with both challenges and opportunities. Despite a notable decrease in EV sales at the start of 2024, a deeper analysis suggests that the situation is far from dire. The fluctuation in sales figures can be attributed to various factors, including economic conditions and the cyclical nature of the automotive industry, rather than a diminishing interest in EV technology.

The conversation around EV adoption is increasingly focusing on the critical importance of charging infrastructure. As EVs gain popularity, the need for accessible, reliable, and efficient charging options becomes paramount. This includes not only expanding the public charging network but also enhancing the feasibility of home charging solutions for the majority of drivers. The transition to EVs is further complicated by current economic pressures and consumer trends, which have temporarily dampened new car sales across the board.

However, the outlook for the UK's EV market remains positive, thanks in part to the growing availability of second-hand EVs, which are beginning to follow more traditional depreciation curves. This trend, coupled with incentives for company car ownership and the impending influx of leased EVs into the used market, is expected to broaden the appeal of electric vehicles beyond the early adopters.

To support this shift, a multifaceted approach is required—one that addresses the proxy-culture war against progress improves environmental impacts, and significantly expands the charging infrastructure to keep pace with demand. Governmental investment, legislative support, and private innovation will all play pivotal roles in shaping the future of EVs in the UK.

In essence, while the path to widespread EV adoption is fraught with obstacles, the foundations for a sustainable automotive future are being laid. By prioritising the development of a comprehensive charging network and embracing policy measures that encourage EV uptake, the UK can accelerate its journey towards cleaner, more sustainable transportation solutions.