The Road to 2035

From consumer incentives and new entrants to challenges and opportunities in the market, we embark on the journey toward 2035, shedding light on the evolving landscape of electric vehicle (EV) adoption in the UK. In this blog post, we provide valuable insights into key aspects such as consumer incentives, emerging players, and the challenges and opportunities shaping the market.  

The recent decision by Rishi Sunak and the UK government to push back the ban on the sale of new petrol and diesel vehicles from 2030 to 2035 has sparked mixed reactions throughout the automotive industry. While some manufacturers conveyed discontent, Toyota welcomed the move and expressed enthusiasm around the need for a variety of low-emission technologies. Ford on the other hand urged the government to continue with the 2030 target, emphasising its importance for accelerating the transition to a cleaner future, and other automakers sought clarity and certainty, expressing concerns about confidence in the industry. Despite differing opinions, UBS, the investment bank, viewed the move positively, considering it a more realistic approach to the transition to EVs, aligning the UK with the EU’s targets.  

UK's Zero Emission Vehicle Mandate Sparks Electric Revolution 

In a culturally shifting move towards a greener future, the UK has officially implemented the Zero Emission Vehicle (ZEV) mandate, signalling a shift in the automotive industry. This mandate commenced on the 3rd of January this year (2024), positioning the UK as a global leader in the race towards sustainable transportation. Let’s delve into the details of the ZEV framework and explore the potential impact on the economy, industry, and the daily lives of families as we get closer to 2035.  

The ZEV mandate lays out a clear roadmap for the automotive industry, stating the percentage of new zero-emission vehicles that manufacturers must produce annually until 2030. By 2030 a remarkable 80% of new cars and 70% of new vans sold in the UK are expected to be zero-emission, to achieve 100% zero-emission vehicles by 2035, aligning the UK with other major global economies including France, Germany, Sweden, and Canada. Click below to find out more.

The implementation of the Zero Emission Vehicle mandate marks a significant milestone in the UK’s commitment to a sustainable and environmentally friendly future. With a comprehensive regulatory framework, substantial investments, and active collaboration between the government and industry leaders, the UK is well-positioned to lead the global transition to EVs. As the automotive landscape undergoes a revolutionary shift, the ZEV mandate paves the way for a cleaner, greener, and more sustainable future for generations to come.  

Understanding the Regulatory Landscape 

The impact of regulatory decisions, such as the Zero Emission Vehicle (ZEV) mandate, which mandates that at least 80% of all new car sales be electric by 2030, delays the ban on new petrol and diesel cars and confused consumers, but the ZEV mandate has accelerated the industry's shift towards delivering an electric future by attempting to make EVs more accessible for the general public.  

Market Dynamics and Consumer Trends 

Despite a record 18% increase in the total number of new electric cars sold in 2023, the market share of electric vehicles witnessed a slight decline. Private retail buyers, who typically contribute significantly to new car sales, showed limited interest in electric cars, with only one in five new electric car sales attributed to individual buyers. 

Supply and Demand Dynamic 

There was a significant increase in the supply of new electric cars, outpacing demand from retail buyers. Discounts on new electric cars reached record highs, averaging 10.6%, as manufacturers and retailers sought to stimulate uptake. However, these discounts alone may not bridge the price gap to stimulate the required retail demand. 

Impact of New Entrants, Especially from China 

Chinese brands, partnering with retailers in the UK, aim to disrupt the market and capitalise on the lack of affordable choices. New Chinese entrants accounted for less than 1% of new electric cars advertised on Auto Trader at the end of 2023 but garnered significant consumer interest. 

Challenges and Opportunities for New Entrants 

While new Chinese entrants face challenges in converting consumer engagement into sales due to limited brand awareness, these entrants may benefit from lower brand loyalty in the UK compared to other European countries. 

The Future Path to Mass Adoption 

To accelerate mass adoption by 2035, there must be changes made from the industry and government including fairer charging costs, more incentives to make EVs affordable, and creative ways to incentivise UK drivers to make the switch. 

The Rise of Used EV Market 

While demand for new electric cars slowed, there was a surge in demand for used electric cars in 2023. Lower prices and increased affordability led to a 52% increase in total demand for used electric cars. However, retail prices of used electric cars remained under pressure, falling 23% compared to the previous year. 

Barriers to Entry and Slow Uptake 

Consumers faced several barriers to entry, including high upfront costs, concerns about charging infrastructure, and confusion surrounding government decisions. The introduction of the ZEV mandate in 2024 also played a role in slowing the uptake, as brands below the target delayed potential EV sales to 2024. 

As the electric vehicle market navigates through challenges and opportunities, the industry must focus on addressing consumer concerns, providing affordable options, and fostering a competitive landscape. By listening to consumer needs and implementing necessary changes, the UK can pave the way for a greener future on The Road to 2035.