E-MOBILITY IN
THE FAST LANE
How the growth of Electric Vehicles will impact real estate
INTRODUCTION
Across the world governments, businesses and citizens are responding to the climate crisis. Among the many measures necessary to reduce our carbon emissions is the transition from combustion engine vehicles to electric vehicles (EVs).
The electric car market is growing rapidly. As of the end of April 2022, there were more than 858,000 plug-in cars with approximately 470,000 BEVs and 385,000 PHEVs registered. Last year saw the biggest annual increase in number of registrations, with more than 740,000 plug-in hybrid and battery-electric cars registered, showing a growth of 70% on 2020. Electric car registrations continue to rise in absolute numbers, with 19,348 new registrations in April 2022 (12,899 BEVs and 6,449 PHEVs), the market share last month was 16.20%. The number of electric cars as a proportion of all new cars showed a significant increase in 2021. In 2015 just 1.1% of new vehicles registered were EV, compared to 3.2% in 2019; by the end of December 2021, this figure had accelerated to 18.6% (11.6% BEV and 7.0% PHEV). These numbers reflect both the increase in demand for electric vehicles and the decline in demand for traditional, particularly diesel, cars.
The UK currently ranks fifth worldwide in electric car volumes sold and twelfth in terms of market penetration, according to McKinsey. A total of 108,205 EVs were sold in 2020 in the UK, representing a 180% year-on-year rise and rising from 1.6% of the overall UK car market to 6.6%. Meanwhile, PHEV sales rose 90% to 66,877, rising from 1.5% to 4.1% of the market. Have no choice but to rely on the public charging network.
However, the UK largely lacks the key infrastructure necessary to support the continuous growth of electric vehicle demand. 75% of electric vehicle users rank lack of access to adequate charging facilities at work as one of the greatest barriers to purchasing an EV in the first place. There were no further incentives for electric car uptake in the Spring Budget 2022. Organisations such as the AA and the RAC have called for a ‘fairer’ approach to VAT on electricity in a new campaign called ‘FairCharge’. Currently, drivers who charge their electric car at home pay 5% VAT whereas those who have to rely on public charge points pay 20%. The FairCharge campaign believes this to be an unnecessary barrier in the transition to electric cars for the 38% of people who can’t charge an EV at home as they would have no choice but to rely on public charging network.
As of June 2022, the government has closed the plug-in-car grant, implemented to kickstart the UK's electric vehicle revolution. The scheme provided support for installing an electric vehicle charge-point, with a grant of up to 75% for homeowners who live in flats and people in rental accommodation (flats and single-use properties). After the successful sale of nearly half a million electric cars, the scheme has succeeded in creating a mature market for ultra-low emission vehicles, helping to increase the sales of fully electric cars from less than 1,000 in 2011 to almost 100,000 in the first five months of 2022 alone. The government is now refocusing funding towards the main barriers to the EV transition, including public charging and supporting the purchase of other road vehicles where the switch to electric requires further development. To continue the drive towards net zero and ensure effective use of taxpayer funds, £300 million in grant funding will now be refocused towards extending plug-in grants to boost sales of plug-in taxis, motorcycles, vans and trucks and wheelchair accessible vehicles, as announced in the autumn statement.
In addition to financial incentives for EVs, the UK Government has crucially banned new petrol and diesel vehicle sales from 2030, brought forward from an initial date of 2040.
With significant momentum now towards growth in EVs and statutory support, the future direction of automotive transportation is clear. E-mobility is the future.
By reacting now landlords, developers and occupiers will be able to match demand and supply and increase the appeal of real estate assets.
137,498
As of 2022, 137,498 new electric cars have been sold in the UK.
£500m
Set aside to support the roll-out of new rapid charging hubs
£403m
Extension of the plug-in car grant until 2023