Why electric vehicles are booming during the coronavirus crisis

Every year, fintech firms dominate LinkedIn's UK Top Startups list, but this year is slightly different. Yes, many of the firms in the top 10 are indeed fintech companies, or positioned in the wider finance arena, but there’s a new industry that’s broken in: electric vehicles.

Commercial EV firm Arrival is in the number-one spot this year. The London-headquartered company was only founded in 2015, but earlier this year managed to achieve so-called "unicorn" status with a valuation of ￡3bn, after securing a whopping funding round of ￡85m. 

Arrival counts the likes of delivery heavyweights UPS and Royal Mail as customers – both have been trialling its electric vans in their delivery fleets – but the firm is branching out into other areas, too, recently announcing the creation of an EV bus.

Number three on our UK Top Startups list this year is e-bike and e-scooter retailer Pure Electric. The firm, which has its headquarters in Glastonbury, was created in 2018 and since then has made a swift and impressive land grab in the micro-mobility space.

Starting life as an online retailer of e-scooters, the firm then branched out into bricks-and-mortar stores, selling both electric bikes and scooters. When Halfords announced it was closing its Cycle Republic bike store chain, Pure Electric swooped in to take up some of the brand’s prime real estate. It reopened 11 Cycle Republic stores under the Pure Electric fascia, saving some 85 jobs.

Surge in micro-mobility demand

Public transport use plummeted when the government first introduced lockdown measures back in March. People were encouraged to stay at home or travel by other means if at all possible. Data from the Department of Transport shows that National Rail use in April and May fell to just 5% of that seen in the same period in 2019, while tube travel in London dropped to 6% and bus journeys also took a nosedive. However, cycle use in England increased to 191% of that seen at the beginning of March. This is a trend that has continued, with cycle use in August remaining much higher than average, at 145% of the usage recorded in early March.

A survey in August of commuters across markets including the UK, the USA, France and Germany by British bike retailer Brompton found more than a third of respondents' commuting habits had recently changed or were set to change as a result of Covid-19. Public transport came out as the overall loser with many swapping bus, underground and rail travel for cycling instead.

The company witnessed a surge in business from May to June, with its e-bike proving more popular than ever – orders for the Brompton Electric model doubled compared with the same period last year. 

It's a trend Pure Electric has been experiencing – and relishing – too. The Somerset firm has witnessed incredible demand for both e-bikes and e-scooters, with monthly turnover growing by around 1,500% compared to early Q1 2019.

“Interest in e-bikes and e-scooters accelerated as we went through the lockdown experience. People have had enough of sitting in traffic jams, or paying a fortune for parking – assuming you can get a space; they want active travel, clean air and to save money. These pressures have all been building for years; Covid-19 accelerated everything,” said Peter Kimberley, CEO of Pure Electric.

Kimberley believes interest in, and adoption of, micro-mobility will continue on its upwards trajectory, but one thing somewhat hampering its progress is a lack of the necessary infrastructure. 

“The government has published a positive strategy on green travel; all the voters who have put their trust in Boris and his team now need them to deliver on their promises. They still haven’t committed nearly enough money to cycling and micro-mobility infrastructure, or to recognising it as a mode of transport in its own right," he said.

Trials of rental e-scooters are underway in various locations across the UK, but it's currently still illegal for people to ride their own on public roads. The trials were scheduled to commence in 2021, but the government brought them forward to this June as part of its bid to steer more people away from using public transport and onto "greener alternatives".

The government plans to determine whether to fully legalise e-scooters and other micro-mobility vehicles using information gathered during these trials, alongside responses to its 'Future of transport review', evidence from e-scooter use internationally and additional research.

EV car sales buck the negative trend

It's not just e-bikes and e-scooters that have been turning heads over recent months – interest in electric cars is on the rise, too. It's no secret that the coronavirus pandemic has had a hugely negative impact on the global automotive industry, but stats from data firm IHS Markit show that things haven't been quite so gloomy for the electric and hybrid vehicle segment. Registrations of plug-in electric and hybrid vehicles in the UK were 94% higher in the first half of 2020 than they were in the same period last year.

Ian Fletcher, principal analyst at IHS Markit, said: "UK demand for plug-in passenger cars continues to grow despite the reduction in government incentives for such vehicles. This is partly because of the regulatory environment and the demands placed on manufacturers to meet European fleet CO2 emission targets for 2020/21."

Fletcher explained that automakers have been focusing on the development of these vehicles in order to contribute to their individual targets, resulting in many new EVs coming to the market in the past 12 months. 

"Volumes will continue to grow going forward as more models and variants are introduced, charging infrastructure is built up, consumer acceptance in the technology strengthens and to meet regulator demands," the analyst added.

Earlier this year, the government announced its intention to bring forward the ban on the sale of new petrol, diesel or hybrid cars in the UK from 2040 to 2035 at the latest. It's part of a drive to bring the nation's total greenhouse gas emissions to net zero by 2050.

Avinash Rugoobur, president of this year's number one Top Startup, Arrival, said his firm's vision centres on the belief that demand for zero-emission technology will grow globally and exponentially over the coming years "as we move towards a more sustainable world".

The executive, who formerly led innovation activities at the Silicon Valley office of General Motors, said it is this that gets him and his team out of bed every morning, and he hopes it will soon become reality.

"Covid-19 has brought into focus a lot of the issues that we've been working on, including how we can reimagine our public transport networks around the needs of people today. We're excited about the opportunity to work with governments to help solve this challenge so that cities can emerge from this pandemic stronger and more connected than ever before," Rugoobur said. 

The coronavirus pandemic has forced many businesses to enter survival mode, with sustainability targets falling by the wayside. However, once we emerge from the other side of this crisis, environmental considerations will likely be pushed firmly back into focus. This, in itself, could create a whole wealth of new business opportunities – and who knows, perhaps the sustainability sphere could conjure up another UK unicorn.

Check out all of LinkedIn’s Top Startups in the UK here. #LinkedInTopStartups