Written by Darran Messem, Director, Transport & Sustainable Development

New vehicle registration data published by the UK Government this month shows a substantial year-on-year increase in hybrid-electric vehicle registrations in Quarter 1 2018, in contrast to a substantial decline in the overall market, and a decrease in pure electric vehicle registrations. The new data confirms the view that whilst there is a significant increase in the number of people considering buying an electric car, the large gap between consideration and purchase suggests that substantial barriers to adoption remain.

Hybrids up; fully-electric down

Nearly 33,000 hybrid-electric vehicles were registered in Q1 2018, according to Department for Transport data. This as an increase of nearly 15% on Q1 2017 hybrid-electric registrations of just over 28,000. In contrast, total new light-duty vehicle registrations fell by 12%, and petrol-only and diesel-only registrations fell by over 13%. Plug-in hybrid-electric registrations increased by 33% from 8,481 vehicles to 11,301, but fully-electric and range-extended electric registrations fell to 4,519 vehicles from 5,502, a decline of 18%, continuing the divergent trend between plug-in hybrid and fully-electric that’s been apparent since quarterly data was first published in 2014.

The data suggests that new vehicle buyers (and leasers) are not sufficiently persuaded by the benefits of electrification to opt for large numbers of fully-electric vehicles. This is despite the growing intention to buy an electric vehicle in the future, highlighted previously. Electric (pure and extended range) vehicles accounted for just 0.62% of total registrations in Q1 2018, compared with 0.67% in Q1 2017, despite the proportion of over-16s intending their next vehicle to be electric rising from 8% to 12% over the same period.

Rich person’s toy?

Regional uptake of Ultra Low Emission Vehicles (ULEVs) also released by the Department for Transport in June shows that the greatest increase in ULEV uptake between Q1 2018 and Q1 2017 was in relatively affluent commuter areas. The three regions showing the greatest percentage increase were Warwickshire (188%), Gloucestershire (173%) and Oxfordshire (158%). There is anecdotal evidence many EVs and ULEVs are the second cars in a household. It’s also no coincidence that two of these three counties have relatively high exposure to automotive research and manufacturing employment. Unsurprisingly the high-uptake regions have a relatively dense high-speed charging network, but this isn’t necessarily the key driver of increased uptake. The lowest rates of increase were in the North East, Greater Manchester and Lancashire; the latter two also having relatively dense high-speed charging networks.

2040: An achievable target?

The UK Government has set a 2040 target for the replacement of new conventional petrol and diesel engine vehicles with zero-emission vehicles. For this target to be met with plug-in hybrid and electric vehicles (a tougher scenario than including hybrids without plug-in capability), a substantial acceleration in uptake is required. The target is not achievable at the current rate of growth – on a ‘straight-line’ basis – of an additional 0.5 percentage-points market share per annum. A compound annual growth rate of at least 19% will be required. Application of a technology-adoption S-curve model (Rogers, E M., 1962) shows how a typical technology-adoption profile that fits with the trend to date may deliver the target, with the peak rate of growth in the curve of 8.9 percentage points (absolute change) in 2029.

Achieving this rate of increase requires current barriers to adoption to be addressed quite urgently. Given the gap between intent and actual purchase, and the gap between hybrid and pure-electric uptake, the data suggests the appeal of electrification is rising but confidence in electric vehicles has a long way to go to match confidence in internal combustion engines, particularly petrol. In the next article in this series we’ll be looking at the barriers to EV uptake, and particularly how communication can help address them.

On July 18 Madano’s Transport Practice will be hosting a breakfast meeting to discuss our analysis of UK electric vehicle uptake with key industry stakeholders. If you’d like to attend, please contact Darran Messem.