Is the future electric?

21th August 2015

Page: 1 of 2 >> Next

There has been a lot of talk in the news recently about electric cars, which has got many people speculating whether they will become the next generation of motoring.

Call Wiser has put together this guide on the most recent developments to bring you up to speed.

The story so far

The electric car is by no means a recent concept, in fact the first electric cars were produced in the 1880s and were popular until the early 20th century when advances in internal combustion engines and the mass production of cheaper petrol powered vehicles led to the decline of electric drive vehicles.

Interest in electric vehicles was partly revived during the energy crises of the 1970s and 1980s, but this was short lived and electric cars did not make the mass marketing stage.

Since 2008 however, there has been a renaissance in electric vehicle manufacturing, inspired by a number of factors including advances in technology (particularly batteries) and energy management, increasing oil prices and a need to reduce greenhouse gas emissions. Several national governments have also introduced a range of incentives to promote the introduction and adoption of electric vehicles into the mass marked, including tax credits, subsidies and other investments.

A number of large car makers, including BMW, Telsa, Chevrolet and Nissan are now manufacturing electric cars for the mass markets, while governments continue to develop and implement legislation and charging infrastructure to support a surging demand.

Related article: Turning up the volume on Electric Cars

How many people drive electric cars in the UK?

By the end of last year, over 24,500 plug-in electric vehicles had been registered in the UK, of which more than half (14,598) were registered in 2014 - four times as many as 2013. However, the Society of Motor Manufacturers and Traders points out that this is still a tiny percentage of the 2.5 million new cars registered in 2014.

The following table presents registrations of the top selling highway-capable plug-in electric cars by model between 2010 and December 2014:

Registration of top selling highway-capable electric cars by model
in the UK between 2010 and December 2014
Model Total
Nissan Leaf 7,197 31.9% 4,051 1,812 699 635  
Mitsubishi Outlander P-HEV 5,370 23.8% 5,370        
Renault Zoe 1,394 5.6% 1,016 378      
Toyota Prius PHV 1,255 5.6% 276(2) 509 470    
Vauxhall Ampera 1,039 4.6% 405(2) 175 455 4  
BMW i3 1,029 4.6% 874(2) 155      
Tesla Model S 474 2.1% 474(2)        
Peugeot iOn 401 1.8% NA 26(3) 251 124  
Mitsubishi i MiEV 260 1.2% NA 1(3) 107 125 27
Citroën C-Zero 201 0.9% NA 45(3) 110 46  
Volvo V60 Plug-in Hybrid 141 0.6% 141(2)        
BMW i8 107 0.5% 107(2)        
Total registrations 22,536 100% 14,518 3,586 2,254 1,082 138

Notes: NA: not available. (1) Market share as percentage of the 22,536 highway-capable electric cars registered in the UK
since 2010 through December 2014. (2) CYTD through September 2014. (3) CYTD through June 2013.

Source: Wikipedia

Why switch to electric?

Running costs

Electric cars cost around 3p per mile to run, compared with around 15p per mile for the average petrol car, and incur no road tax.

Despite this however, the purchase price of electric vehicles remains higher than petrol or diesel models, mainly due to the expensive lithium batteries used to power them. The price of insurance for electric cars is also likely to remain higher than conventional models, at least until insurers have gathered sufficient claims data or the price of components (such as batteries) begin to fall.

In a study commissioned by the Low Carbon Vehicle Partnership (LowCVP), the total cost of ownership - including the upfront purchase price and running costs - of environmentally friendly electric vehicles was calculated at around £5,000 more than petrol and diesel cars.

It goes on to predict that it could be as late as 2030 before electric cars will become cheaper than conventional models, which is also the date by which the government’s climate advisors say 11m electric or plug-in hybrid models need to be on UK roads to meet its carbon targets.

Managing director of LowCVP, Greg Archer, did not rule out the possibility of alternatively fuelled vehicles becoming more competitive sooner, suggesting that there is a one in twenty chance of it happening by 2020. However, he pointed out that: “Major technology takes a couple of decades before it receives parity with current technology.”

In the meantime, Sheffield based Faradion recently announced that it has developed a sodium-ion battery, which performs similarly to a lithium-ion equivalent, costs 30% less and is more safely transported.

Despite this major technological development however, Chairman of Faradion, Chris Wright echoed LowCVP’s sentiments, pointing out that: “The problem with getting the batteries into cars is that it can take eight years from when the deal is done to vehicles going on sale.”

Government incentives

Although petrol and diesel cars will continue to dominate the new market for the foreseeable future, the government is making hundreds of millions of pounds available to drive an electric vehicle revolution.

The coalition government earmarked £500m to support the take up of ultra-low-emission vehicles (with CO2emissions below 75g/km) between now and 2020, having already spent £400m encouraging demand.

Much of the funding is being used to encourage the take-up of electric vehicles amongst consumers and businesses, through investment in a national network of recharging points and, as well as plug-in car and van grants towards the purchase of new vehicles.

With fleets now accounting for more than half of new vehicles registered in the UK each year, businesses have been a strategic focus for the government and ‘plug-in’ grants allow both businesses and private users to save up to £5,000 off the price of a car and up to £8,000 on vans.

The Department for Transport has acknowledged that demand for electric vehicles is “rising sharply” and reports that more than 25,000 electric car and van grants have been claimed since the scheme began in 2011.

More recently in Scotland, a £2.5m fund is being used by Transport Scotland to fund interest-free loans of up to £50,000 (£100,000 for businesses) for the purchase of electric or plug-in hybrid vehicles.

Scottish Transport Minister Derek Mackay said: “Encouraging mass changeover to electric vehicles, from more polluting ones running on petrol or diesel, is a key to cleaner road transport in Scotland and a fundamental factor in achieving our ambitious climate change targets while also improving local air quality.”

“Electric vehicles already offer large savings to drivers through reduced fuel and taxation costs and this fund will further encourage new buyers by addressing the current cost premium often cited as a barrier to making the switch.”

Page: 1 of 2 >> Next

The Call Wiser guide to Holiday Car Hire

Hiring a car abroad can be an essential part of many holidays, providing a convenient means of getting to your destination, getting out and about and exploring the local area.

To make sure that you’re not caught out this summer, Call Wiser has prepared this useful guide to holiday car hire. Read more...

Summer Driving Tips to help you keep cool behind the wheel

Rising temperatures and extra holiday traffic can put extra demand on your journeys at this time of year. However, a little planning and preparation can go a long way to help keep your stress levels under control and your vehicle moving. Read more...

Call Wiser is a trading name of Be Wiser Insurance Services Ltd. Registered in England No. 6097813. Be Wiser Insurance Services Ltd are Authorised and Regulated by the Financial Conduct Authority 465471

Call Wiser, Riverside House, 35-37 Bridge St, Andover, Hampshire, SP10 1BE, 0333 003 3270,