Transportation

Electric Vehicles Offer Ray Of Hope After Shocking Few Months For Car Sales


The Society of Motor Manufacturers and Traders (SMMT) has recorded an 89 per cent fall in UK car sales in May, a catastrophe that has clearly been caused by the Coronavirus pandemic. The recently released market figures from analyst firm JATO Dynamics have echoed these dismal results across Europe, with a staggering 78 per cent drop in car sales for April 2020 compared to April 2019, and a 39 per cent drop in March.

However, the SMMT figures also revealed that EV sales were still up 21.5 per cent in the UK in May, despite the overall collapse of the market, with a 131.8 per cent growth across the entire year to date. Similar relatively good results have been shown by JATO in Europe, with only a 29 per cent drop in April and an increase of 15 per cent in March. Overall, EVs have increased their European market share from 7 per cent in 2019 to 17 per cent in 2020 – a huge leap for just one year.

The big recent winner was the Tesla
TSLA
Model 3, which was the number-one seller overall in May, even beating petrol, diesel and hybrid alternatives in the UK. It was the number-one selling EV in April and March in Europe too, selling three times its nearest competitor, the Renault Zoe. The Model 3 managed to come second overall across all car types in Europe for March, including internal combustion engine ones.

It’s a pretty amazing situation when what was quite recently considered a niche vehicle type for early adopters starts outselling the Ford Focus and Renault Clio across Europe, with the VW Golf the only more popular car. Some of the reason for this can be ascribed to Tesla’s direct sales model, which has been a little more resilient to the constraints of lockdowns than the traditional model based around physical dealerships. But the Model 3 was also a much-anticipated step forward for EVs into the mainstream.

The Model 3 was clearly aimed at that midsized car business user once known as Mondeo Man – the sales or corporate executive who tends to travel a lot for meetings. This kind of user may have transitioned over from the Ford Mondeo to a more premium BMW 3-series, Audi A4 or Mercedes C-class, but they still represent an important volume area, particularly for fleet sales, and Tesla is the only manufacturer taking this car format seriously yet. When I reviewed the Tesla Model 3, it ticked all the boxes for this kind of buyer, with a range up to 350 miles and performance to humiliate even a hardcore BMW M3 driver. The Model 3 is perfectly capable of handling the 12,000 average miles a business user does a year and will be cheaper than a petrol or diesel car to run, too.

In contrast, most of the premium European brands have so far focused attention on the SUV market for their EVs, presumably because this type of car makes up 30-40 per cent of annual sales. But their SUVs are significantly pricier than the equivalent petrol or diesel models. Audi’s e-tron starts at just under £60,000, whereas the similarly sized Q7 is more like £54,000. The Mercedes EQC is even more expensive at nearly £65,000, and the Jaguar I-Pace is close to £64,000. BMW, after luring many early adopters with the excellent i3, doesn’t even have an EV in this class yet. The Model 3 starts at just over £40,000, which isn’t far off a reasonably specified midsized petrol or diesel vehicle from BMW, Audi or Mercedes. But the zero per cent benefit in kind for electric vehicles make them a no brainer in the UK as a company car, potentially saving an employee nearly £15,000 over three years for a Model 3 compared to, for example, a Mercedes C220d SE.

The EV has moved a long way since electric milk floats and the comically bad G-Wiz. The market-bucking performance of EVs despite the pandemic has shown that there is a clear commercial appetite for these cars now, which will be further encouraged by governmental incentives. The EU is planning to invest tens of billions of Euros into clean vehicles and zero-emission drivetrains as part of its clean recovery plan, and the UK government is putting hundreds of millions of pounds into charging infrastructure over the next few years, as well as £108 million for the UK Battery Industrialisation Centre. The pandemic may have been a horror show for car manufacturers in general, but the rapid growth in EVs shows a hopeful and positive way forward now we’re reaching the other side.



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