electric-cars

Sustainability concerns power up electric cars market

In General News, Investment News, Management and Strategy, Thought Leadership by Alexandre MickiewiczLeave a Comment

Go green or go home! As consumers grow more and more environmentally conscious, the steps to reduce their carbon footprint have permeated most aspects of everyday life. It’s not just about recycling waste or turning off lights anymore, it’s about investing in long-term solutions to minimize the damage – solutions such as electric cars.

Is demand driven by product development, or does product development respond to demand? Data shows that the two are interwoven. Car pollution being a key environmental issue, the UK government has been involved in pushing the electric car agenda, with proposals such as the clean growth strategy (published in October 2017) aiming for three fifths of new cars being electric by 2030. Further policies, such as additional funding for the EV (electric vehicle) charging infrastructure, or the discount on the price of specific EVs, known as “plug-in grant”, are testament to the aim of adopting a greener stance on the roads.

Consumer demand in electric cars has mirrored this governmental push, with new electric car registrations increasing by 10% in 2018, while traditional car registration going down 7%. onefourzero’s data confirms this trend, recording that both search demand for electric-car related terms and online conversations on the topic have nearly tripled in the last 4 years. Ever-increasing demand is further boosted by events such as in July 2017 when the launch of a new Tesla model coincided with a governmental bid to ban new diesel and petrol vehicles in the UK by 2040.

Yet, what consumers search for and talk about does not necessarily imply conversion.

One of the main concerns regarding the purchase of an electric car remains the price: electric cars are still perceived as luxury items, with a Compare the Market study finding that 44% of drivers affirm they can not afford to make the switch to eco-friendly vehicles.

Indeed, electric cars are often associated with high-end brand Tesla, which has been disrupting the industry. Despite the recent announcement of the Model 3, marketed as the first “budget” Tesla vehicle, the brand is still associated with expensive high-tech cars. And while the company remains particularly successful, search demand for its several car models has seen an 8.8% drop over the last year.

Meanwhile, traditional brands have been jumping on the electric car opportunity and introducing potential mass market versions of the pre-supposed luxury product. Our data shows that Nissan, Hyundai and BMW all benefit from high consumer demand for their zero-emissions vehicles.

As interest for electric vehicles grows, so do concerns around the infrastructure available. 14% of all conversations revolve around charging, suggesting that the consumers considering switching to green driving worry about how convenient the alternative to gas stations really is.

Despite 11,047 existing charging points in the UK at present, most drivers consider that the infrastructure is insufficient considering the limited range (how many miles before refuelling) of EVs compared to traditional vehicles.

This constitutes one of the main future challenges for a wide adoption of EVs in the UK, with an aim to emulate the examples of countries such as Norway, where nearly a third of new vehicles are electric. Thankfully, the government is on it, with the promise to have all its funded home charging points equipped with ‘smart’ technology from July 2019, meaning a charge point that can be remotely accessed and can receive a signal.

These exciting developments suggest that, while electric cars are not a novelty, they are now starting to become a mass market product with the ambition of being here to stay. On the same note, the infrastructure around it will also see a boost in investment to meet the demand, opening space for innovation in different sectors. All we need is the appropriate technology and urban planning to see electric cars thriving.

To find out more about how onefourzero’s data analysis and insights can help you identify opportunities for growth and potential risks, click here or contact fleur@onefourzerogroup.com

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