Driv­ing growth dur­ing a pe­riod of un­cer­tainty

Belfast Telegraph - Business Telegraph - - News - Laura mccann, As­sis­tant man­ager, Au­dit and as­sur­ance @grant­thorn­tonni Laura Mccann can be con­tacted at laura.mccann@ie.gt.com Grant Thorn­ton (NI) LLP spe­cialises in au­dit, tax and ad­vi­sory ser­vices

The global au­to­mo­tive mar­ket is cur­rently fac­ing a pe­riod of change and un­cer­tainty. This is due to the demise in sales of tra­di­tional diesel mod­els, the growth in shared mo­bil­ity and the con­cept of driver­less ve­hi­cles.

One trend that is fore­cast to trans­form the mar­ket is the rise in pop­u­lar­ity of elec­tric ve­hi­cles (EVS). With the mod­ern-day con­sumer be­com­ing in­creas­ingly en­vi­ron­men­tally con­scious, the demand for elec­tric ve­hi­cles is ris­ing — this can be seen from elec­tric cars to elec­tric rick­shaws, e-buses to For­mula E rac­ing. Only this month, Uber’s CEO an­nounced plans to di­ver­sify its ser­vices into elec­tric bikes and scoot­ers.

There are al­most four mil­lion EVS cur­rently on the road world­wide, a sharp in­crease from just 500,000 in 2014. In the UK mar­ket, sales of pure elec­tric and hy­brid ve­hi­cles are up 25% this year, with a new model reg­is­tered ev­ery nine min­utes. This up­ward tra­jec­tory is a re­sult of a few key rea­sons. Firstly, the cost of EVS to the con­sumer has de­creased due to a 79% drop in the price of lithium-ion bat­ter­ies over the past seven years and the avail­abil­ity of govern­ment sub­si­dies.

Ad­di­tion­ally, there has been an in­crease in com­mit­ments from all lead­ing car man­u­fac­tur­ers to trans­form their cur­rent of­fer­ings to in­clude a larger range of elec­tric ve­hi­cles. EVS are en­ter­ing the global main­stream mar­ket, but will a lack of progress in charg- ing in­fra­struc­ture still present a bar­rier to growth?

For a long time, the main bar­rier to growth for EVS has been re­lated to a lack of in­vest­ment in the charg­ing in­fra­struc­ture rather than the de­vel­op­ment of ve­hi­cles, lead­ing to the dubbed ‘range anx­i­ety’ de­ter­ring main­stream sales. This has proved a ma­jor ob­sta­cle to mass adop­tion of elec­tric ve­hi­cles, which are un­able to travel the same dis­tances as con­ven­tional ve­hi­cles us­ing petrol or diesel.

Whilst im­prove­ments to charg­ing sta­tions have made it pos­si­ble to charge a car to 80% in 10 to 15 min­utes, the UK as a whole is fall­ing short on tar­get num­bers.

How­ever, could this be set to change?

The Govern­ment is plan­ning to make it a re­quire­ment that all new homes built in the UK must have elec­tric ve­hi­cle charg­ing point in­fra­struc­ture. Ad­di­tion­ally, new street light­ing col­umns in ar­eas with on-street park­ing will also be fit­ted with EV charge points.

In June 2018, BP ac­quired the UK elec­tric ve­hi­cle charg­ing com­pany, Charge­mas­ter, which held the largest net­work of EV charg­ing points in the UK, for £130m. The aim was to ac­cel­er­ate its plans to pro­vide EV charg­ers at its fore­courts, which is set to be in ac­tion within the next 12 months.

This high­lights, not only that the fu­ture of the mo­tor in­dus­try is elec­tric, but also that the bar­ri­ers to growth may not be as high as once ex­pected.

Elec­tric ve­hi­cles rep­re­sent an emerg­ing but fast-mov­ing in­dus­try in North­ern Ire­land. There are cur­rently 2,000 EVS on the road across North­ern Ire­land; how­ever, the growth in re­cent years has been ex­po­nen­tial. No­tably, with 336 pub­lic charge points, North­ern Ire­land has higher than av­er­age charg­ing avail­abil­ity in com­par­i­son to the rest of the UK. Can we stay ahead of the curve?

Elec­tric ve­hi­cle sales have risen by 25% this year in the UK

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