Photo: DriveElectric
We've all watched the automotive industry rapidly electrifying as manufacturers implement newer and more efficient technologies in their vehicles. But how extensive is this change, and how will it reflect in the future? According to DriveElectric, around 448,000 new battery-electric vehicles will be registered in the UK in 2023.
DriveElectric is one of the UK's leading electric vehicle leasing companies, and it carries out forecasts for the auto market based on the available data. Specifically, it built its forecast model from its intelligence of the UK market to estimate how many electric cars and vans are registered annually.
Before I go into detail, I'd like to point out that its January 2022 forecast was quite accurate. The company predicted a 16.7% market share for BEVs in 2022, and the actual market share ended up being 16.6%. However, supply challenges lowered the total number of registrations of all cars and vans last year.
DriveElectric is now predicting a 24.9% market share for BEVs this year – the figure remains the same as in the company's original forecast from 2019. Furthermore, it estimated a total market of 1.8 million registrations, of which 448,000 are BEVs.
Several background issues influence the 2023 forecast. First of all, more and more EVs will become available as the industry is slowly recovering from semiconductor shortages experienced in recent years. Moreover, OEMs are improving their production and delivery capabilities, with new EV factories popping up across the globe.
Regarding the UK, fresh EV models are arriving, especially from Chinese brands, and the public charging network is also rapidly expanding as new operators are making their way onto the market. What's more, the UK government is supporting this growth, and businesses will be encouraged to transition to EVs.
Currently, UK company car drivers receive benefit-in-kind (any non-cash benefit of monetary value that employers provide), and EVs were exempted from paying any BiK tax before 2021. The rate increased to 1% before April 2021, and one year later changed to 2%. It will remain the same until April 2025 and then increase by 1% until reaching 5% in April 2028.
Even though it's rising, it's still a fraction of how much businesses have to pay for petrol, diesel, or hybrid cars, so companies are incentivized to choose EVs for their employees. On the other hand, as the Managing Director of DriveElectric, Mike Potter, said, "the risk is that retail demand will be impacted by cost of living concerns."
Battery electric heavy vehicles, such as the 7.5t Tevva truck, are also being introduced, but DriveElectric believes the real challenge will be developing a charging network for them.
The UK government plans to introduce a Zero Emission Vehicle Mandate in 2024, although many details remain unknown. The goal is to mandate manufacturers to sell more and more EVs each year, as the country is prepping for the ban on new petrol and diesel car and van sales set for 2030.
DriveElectric goes even further into the future and estimates around 50% of total Uk registrations to be EVs from 2025 onwards. The 2030 ban means ICE vehicles will slowly lose their value, and EV prices will gradually become competitive with those of ICE cars.
Besides improving air quality and having lower maintenance costs than petrol and diesel cars, a critical factor in the rapid adoption of EVs is that some people prefer the driving experience of electric vehicles compared to conventional machines.
Before I go into detail, I'd like to point out that its January 2022 forecast was quite accurate. The company predicted a 16.7% market share for BEVs in 2022, and the actual market share ended up being 16.6%. However, supply challenges lowered the total number of registrations of all cars and vans last year.
DriveElectric is now predicting a 24.9% market share for BEVs this year – the figure remains the same as in the company's original forecast from 2019. Furthermore, it estimated a total market of 1.8 million registrations, of which 448,000 are BEVs.
Several background issues influence the 2023 forecast. First of all, more and more EVs will become available as the industry is slowly recovering from semiconductor shortages experienced in recent years. Moreover, OEMs are improving their production and delivery capabilities, with new EV factories popping up across the globe.
Regarding the UK, fresh EV models are arriving, especially from Chinese brands, and the public charging network is also rapidly expanding as new operators are making their way onto the market. What's more, the UK government is supporting this growth, and businesses will be encouraged to transition to EVs.
Currently, UK company car drivers receive benefit-in-kind (any non-cash benefit of monetary value that employers provide), and EVs were exempted from paying any BiK tax before 2021. The rate increased to 1% before April 2021, and one year later changed to 2%. It will remain the same until April 2025 and then increase by 1% until reaching 5% in April 2028.
Even though it's rising, it's still a fraction of how much businesses have to pay for petrol, diesel, or hybrid cars, so companies are incentivized to choose EVs for their employees. On the other hand, as the Managing Director of DriveElectric, Mike Potter, said, "the risk is that retail demand will be impacted by cost of living concerns."
Battery electric heavy vehicles, such as the 7.5t Tevva truck, are also being introduced, but DriveElectric believes the real challenge will be developing a charging network for them.
The UK government plans to introduce a Zero Emission Vehicle Mandate in 2024, although many details remain unknown. The goal is to mandate manufacturers to sell more and more EVs each year, as the country is prepping for the ban on new petrol and diesel car and van sales set for 2030.
DriveElectric goes even further into the future and estimates around 50% of total Uk registrations to be EVs from 2025 onwards. The 2030 ban means ICE vehicles will slowly lose their value, and EV prices will gradually become competitive with those of ICE cars.
Besides improving air quality and having lower maintenance costs than petrol and diesel cars, a critical factor in the rapid adoption of EVs is that some people prefer the driving experience of electric vehicles compared to conventional machines.
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