Office for Budget Responsibility (OBR) confirms my assessment of April 2023 regarding EV sales and growth in the UK!
Andy Corkhill
Interpreter and Persuader. Coach. Mentor. Adviser. Founder and Owner @ Acornz | Business Growth and Founder and Owner @ Electric Avenue - a weekly newsletter on the electrification of transport
For those of you who have read my "EV Nightmare" articles on Linkedin, (links below), the latest update from the OBR (18th Nov. '23) re the EV market and forecasts should not be a surprise.
The OBR has revised down its forecast for EV sales in 2023, from a market share of 25% to 18%. That's a significant 28% reduction in year. In addition, their forecast for 2027 has been virtually cut in half, from 67% to 38%. These forecast reductions should be a wake-up call to the entire EV supply and associated services chain.
The OBR attributed the adjustment to the absence of low-cost EVs. As I previously reported, manufacturers had, in the main, focused on the "premium" EV market with many early adopters having higher incomes, and the ability to benefit from generous Benefit-in-Kind (BIK) tax advantages for company directors and company car drivers. The average EV is 25-45% more expensive than the Internal Combustion Engine (ICE) equivalent and this high up front cost to change has been a significant deterrent for private buyers who make up the majority of car sales in the UK.
The OBR also confirms my points re the expectant lower running costs of EVs not materialising for many. In some cases, it has proven more expensive than ICE fuelling per mile, admittedly this is when owners have had to rely on public chargers. Public perception and concerns around range anxiety and the availability of public charge points were also highlighted as blockers to adoption.
As an industry segment, EVs have generally failed to deliver the change necessary, to ensure that we remain on target to hit our commitments around Net Zero and Climate Change. There is a lot of "positive" noise, and self back slapping from the EV Industry on what a great job they have done. This is in stark contrast to the experiences, and perception of consumers, and comes amid losses at many manufacturers EV operations running into the billions. Hype versus reality?
Many of you will be familiar with the "Gartner Hype Cycle" (picture attached).
With EVs, we've gone through the "hype curve". The early adopters, the low hanging fruit, have all switched.
We've had a peak of inflated expectations and almost mass hysteria around EVs.
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But over the past 12, possibly 18 months, we've been sliding down through to the Trough of Disillusionment. This has been fuelled by high costs to change, high charging costs (public chargers mainly), range anxiety and a frankly often appalling level of consumer service around public charging due to missing, broken, out of service charging stations, and, ever lengthening queues at the ones that are open and available.
Add to that some appalling depreciation on EV's, down a further 36% this year with one "owner story" doing the rounds on YouTube where an owner is in negative equity on their 2 year old EV to the tune of over ￡35,000! (A ￡120,000 car that is purportedly worth circa ￡40-45,000 after 2 years). Indeed, the situation is so dire that some main dealerships are refusing to quote for, or accept, some EVs as part exchange for a new(er) car.
Contrast that with PHEV (Plug in Hybrid Electric Vehicles) that are up by 40%! Why? From the owners I have spoken with, they believe that they deliver the best outcome and make financial sense. They're cheaper than the EV equivalent. For the small journeys, around town and doing errands, they have a range of around 40 miles on Electric owner which is ample. They can charge them overnight at home easily without needing an expensive high capacity charger. And on longer journeys, they have no range anxiety and significantly higher real world fuel economy than ICE vehicles. In short, with PHEVs, manufacturers have addressed the primary concern of the mass market consumers, and so, they are buying them!
We're now entering the Slope of Enlightenment. Manufacturers are finally focusing on more cost effective EV products, aimed at the mass consumer market. Battery technology is progressing, providing more assurances around range and better reliability/life through the active conditioning of the batteries. We are seeing a significant investment in charging facilities across the country, and finally, some much needed consolidation (though clearly much more is needed) around the number of apps and other facilities you need to pre-register for/or use to gain access to the widest possible network of convenient charging points.
We have a long way to go until we get to the Plateau of Productivity. Right now, the EV segment, and associated services, is very fragmented and inefficient. It's like the wild west out there with new entrants, established players and consolidators, staking their claims. Instead of a wide open prairie, to allow us to roam freely, we're still seeing the barbed wire fences being erected.
As an industry segment, to drive adoption of EVs, at scale and pace, we need to:
The time to pat ourselves on the back for a job well done will come, but it is some way off. And, if we believe the OBR's revised forecasts, that time is further away in the future, than it was 12, or even 6, months ago.
Spot on Andy, we share the same observations about the whole “full EV concept”. I have been saying this about EV for years but without the hard evidence you have now gained. Common sense in my book, it’s not rocket science is it to work out what was happening and what would happen. What is not said in your article is all the harm, human and environmental that the EV phenomenon causes. Every person I have talked to who have an EV car gloss over the harm caused and will cause in getting their car on the drive and just focus on - look at my shiny very expensive car that you can’t afford but I can - oh and I don’t pay road and other taxes but you do. The EV solution is poorly thought through in my view. Yes we need a solution to fossil fuels, don’t deny that and would never deny it, EV for me works in heavily built up urbanised areas where short journeys are the norm, but so does public transport. Don’t see investment and tax breaks in that solution do we? Is that because those who can afford EV wouldn’t be seen dead on a bus?