According to research from the Advanced Propulsion Centre, the transition to electric vehicles could offer the UK economy a potential £24bn growth opportunity.
Electric vehicles have been dividing opinions over recent years. They are currently more expensive to purchase than ICE vehicles, there are concerns over range limitations and the lack of charging infrastructure poses problems for drivers needing to travel long distances. However, they are much better for the environment, cheaper to run than ICE vehicles and often cheaper to maintain.
Meanwhile, no matter what your standpoint is on electric vehicles, they’re set to play a prominent role in the future of the automotive industry. The government’s launch of the Road to Zero Strategy means that at least half of all new vehicles are expected to be ultra low emission by 2030.
This movement could be hugely beneficial to the UK economy, but only if significant investments are made into upgrading the nation’s charging infrastructure.
Where do the economic opportunities lie?
The Advanced Propulsion Centre’s (APC) ‘Strategic UK opportunities in passenger car electrification’ report, argues that the technology required to achieve the government’s long-term objective of zero petrol or diesel cars on UK roads will be crucial to the economy.
The global market opportunity is £97bn, of which there is potentially £24bn within reach of UK companies, the report states. The APC suggests that the UK is capable of delivering this amount of growth thanks to its leading development expertise, established global producers and an extensive chemical supply chain.
The report highlights three main areas for growth opportunities: £2bn for electric machines, £10bn for power electronics and £12bn for batteries. However, the research suggests that delivering on these areas for growth heavily depends on suppliers increasing their capacity to over ten times their current levels by 2030.
When thinking about economic opportunities, it’s also worth considering investment in infrastructure. The cost of charging infrastructure has radically decreased over the last few years, and government funding could significantly lower the cost for many on-street charging stations - encouraging more companies and local authorities to plan ambitious new rollouts.
In addition, to meet their target, the UK government has committed to providing grants to make it more affordable for drivers to own and charge an electric vehicle. The grants will work to offset the cost of charging station infrastructure.
The Office for Low Emission Vehicles (OLEV) has placed £20m worth of funding against on-street residential projects in 2020/21. This will cover 75% of the cost for installing charging stations.
Opportunities for dealerships
The obvious benefit for dealerships when it comes to electric vehicle adoption is the increase in sales, particularly as electric vehicle capacities improve. That said, there may be initial obstacles regarding customer attitudes around charging, as currently there are doubts about how far an electric vehicle can travel.
Dealerships will need to take measures to solve this issue for their customers. To do this, they are considering how to position themselves as providers of mobility solutions, rather than just vehicles.
This means forming strong partnerships with electricity suppliers, data information networks and charge point installers. Doing so will help to create new growth opportunities for dealerships, move in line with advancements in charging technology and help to ease their customer’s transition from petrol and diesel to electric vehicles.
Electric vehicle accreditation
There is also a government-backed scheme that formally accredits dealerships offering a quality service selling electric vehicles.
The scheme is in place to help close the knowledge gap holding drivers back from buying an electric vehicle. Dealerships who have successfully set up a high quality electric vehicle proposition will be known as ‘Electric Vehicle Approved’, and the scheme is hoped to encourage dealers to develop their experience in servicing electric vehicles via training programmes.
This accreditation may be the key to higher revenue for dealerships once public attitudes towards electric vehicles further improves, as buyers will be more inclined to purchase from a dealership with expertise, in both selling and servicing electric cars.
Download the full report
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