Analysis: Is 2021 (finally) the year of the electric car?

British public still needs EV education, says Peugeot UK boss
Government will ban sale of new petrol and diesel cars from 2030

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6 mins read

1 February 2021

This year could be the tipping point for the UK new car market: the point where electric cars cease to become just a headline and move into the realm of viable transport for a significant proportion of the population.

But what does that mean for the future of the British car industry and for the people who buy its products? In the latest of our Autocar Business Live webinars, we spoke to Alison Jones, the Stellantis senior vice-president and UK head of Citroën, DS and Peugeot, and Richard Parry-Jones, a former Ford chief technical officer and past chairman of the Automotive Council, to answer this question and more.

Are customers buying into the total cost of ownership of EVs, rather than what people have been used to in terms of a simple monthly PCP bill?

One thing is clear: electric cars are disrupting not only the technology in the car itself but also the way that people think about what a car might cost.

Jones is of the opinion that it’s still necessary to educate customers to consider the total cost of ownership of an EV compared with an ICE car, rather than just the sale price.

She said: “On the retail side [for private customers] it’s harder, because you have more variables.

“PCP deals are a key way people buy cars in retail, so you have a conversation about the monthly cost for that and then have to talk about the lower monthly running costs [of an EV].

“But that’s not the only thing customers are thinking about. They also think switching to an EV is a big step in terms usage, because of the differences between cars, with factors such as range anxiety, charging infrastructure and where they can charge their vehicles.

“The price you pay for a new electric vehicle isn’t the only consideration for potential customers. There are other barriers people are thinking about, which are maybe bigger barriers at this time.

“That’s why the plug-in hybrids are a great step – the ones that run up to 30 or 40 miles [on electricity alone]. The psychology of how it feels to live with a low-emission vehicle can be really overcome with PHEV.

“Plug-ins give you some reassurance if you’re a one-car family, and they’re already a good contributor to reducing emissions.”

What kind of plug-in hybrids will be allowed after 2030?

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Both Jones and Parry-Jones were clear that a solution is needed to make sure plug-in hybrids are used as they’re intended: to be charged up whenever possible.

Jones said: “From the discussions we’ve had, which are part of the industry discussion, that’s still subject to the detailed work that needs to be undertaken. They have to be efficient and [the sort of car] that you can do an average journey on. Knowing that they’re being charged overnight is a really important part of the work that we need to do with the government to demonstrate how consumers are using them. They have to be efficient.”

Parry-Jones added: “I share your view. The only way they will be allowed to continue is with assurances, using technology and regulation, that they’re actually used as plug-in hybrids, not as tax-beaters.

“The government is naturally a bit sceptical. The only way we, as an industry, will win over the sceptics is providing a level of automation to either compel or heavily incentivise the consumer to make sure they exploit the advantages of a plug-in hybrid.”

What does this mean for the residual values of ICE cars as we go towards 2030?

Jones said: “I think it will be a bit more chaotic. But that’s why we need the certainty of what the taxation will be for low-emission vehicles, to say that ‘okay, this is the landscape of what can happen for the total [40 million vehicle] car parc’. We must retain the residual value of that car parc, because not everybody is going to want to switch or be able to switch to electric. We need a clear plan to provide the certainty of those residual values and how they will move.”

Parry-Jones said: “I can speculate [on residual values], but we haven’t talked about city air quality much yet. The interest and enthusiasm of the government to speed up the adoption of electric cars is driven by the two forces: CO2 [emissions] and city air quality.

“Personally, I think that the residual values of diesel and petrol cars will depend much more on air quality than it will on CO2 contribution. The best way to secure the value of the vehicles going forward is to make damn sure the real-world air quality emissions of the ICE engines meet the goals of city leaders.

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“As such, I think we will see a difference in demand for ICE engines in cities versus rural areas. Things like taxation and congestion charging will disincentivise people from buying those cars in cities, but in rural areas, where air quality concerns are very much lower, the demand will be quite high. I can see a regional separation going forward.”

What does the infrastructure timeline look like?

Although both Jones and Parry-Jones agree that more needs to be done, the two feel it falls to different organisations to upgrade the UK’s infrastructure.

Jones said: “The predictions are that by 2030, 25% of the car parc will be battery-electric. When you marry that up to the overall size [of the parc], that adds up to something like 11 million charging points. And that includes home charging or office-based charging. We’re not at that point at the moment, so we need big investment.

“You will hear the government talk about investing and working with the energy companies, but that rate of growth isn’t fast enough. As an OEM, we can’t drive the infrastructure. That has to come from the government with the energy companies, because you need it as freely available as fuel is today.”

Parry-Jones added: “I would agree that it’s not moving fast enough. But I’m more cautious about asking the government to fund it. I think that the government should do some seed funding, but actually they’re not the best people to decide what customers want. Instead, they should look at regulation to incentivise companies to come into this space and maybe have a tariff model where the customers can pay a small premium for better access to a network. So you can have different levels of service and attract people who go on long journeys to pay a bit more for rapid charging.”

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Are battery EVs the long-term solution?

Parry-Jones said: “It will be a wonderful heady mix of hybrids, EVs and ICEs. Look at the Lotus Evija: this shows that electric vehicles won’t spell the end of excitement in cars.

“Electrification is a long-term part of the solution. Once it has gained a foothold, I don’t see it going away, because it overcomes so many of the downsides of an ICE. It’s actually a very simple [technology]. If you look at a modern ICE, it’s a piece of human ingenuity, but it’s incredibly complex. And the more efficient and the more clean they are, the more complex they are, whereas EVs get simpler and simpler.

“I’m not sure about hydrogen. I built hydrogen cars at Ford, but it’s fearsomely expensive and difficult. I see a role for hydrogen in aircraft, marine and heavy trucks, but I’m not convinced about the long-term role in cars.”

Jones said: “I would agree. I think you can get excitement from electric; we have Formula E, which I think shows that. Our engineers are working to still get fun, excitement and emotion out of the cars. We’re being driven there [towards electrification] by a desire to improve emissions across all industries, and this is our contribution towards that.

“And it’s about navigating that path, providing some form of clear guidance to our customers, as far as we can, so that we can protect their vehicles over the next 10, 15, 20 years. It’s about how we give the consumers the certainty of the benefits of car ownership.

“One thing’s for certain: it’s definitely changing, and it will continue to do so.”

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