A big slow down in BEV sales? We're not concerned...
Posted March 13, 2018 by Emma
You may have seen the recent article by The Times titled, "Electric car sales tumble over price and plugs"... Safe to say our Head of Insights James McKemey had a thing or two to say in response.
You can find the original article here and James' rebuttal below...
So we’ve seen a recent slow down in new EV purchases, specifically full Battery Electric Vehicles (BEVs) that are entitled to the full £4,500 Plug-in Vehicle Grant (PiVG) for cars. But what could have caused this ominous decline?
Over at The Times, a range of reasons for this decline are explored. Our man Steve Gooding of the RAC is on hand to offer consumer concerns over “retail price, range limitation, recharging availability and uncertain residual value.” or the “four Rs”. I admire the old school and on-brand dedication to the letter R and I even agree with 3 of those concerns - i.e. range, cost and infrastructure are what we consider the core barriers to mass adoption. But residual values are one thing that an increasingly positive topic, thanks to a lot of work by key OEMs like Nissan, increasing range (high range EVs have great residual value) and growing consumer understanding of the benefits of EV motoring driving demand in the 2nd hand market (~40% of Pod Point home installs are for 2nd hand EVs).
And I fear Steve has missed two key tricks:
All of these factors have been around throughout the life of the EV industry, they are all actually getting better (hence sales have been improving) - so how can they have caused the recent decline?
Steve, ditch the residuals issue and you could go with Range, Availability of charging and Cost (RAC!) [Click [here](https://pod-point.com/electric-car-news/fully-charged-show) to grasp how our industry is overcoming these (as well as performance(!) and vehicle choice)]
But if these issues are reducing in severity, why have sales of BEVs gone down recently?
If you look close enough, there’s even a hint in The Times article. But first we must establish some facts:
When is a “sale” a “sale”?
A car “sale” is when a vehicle is delivered to a customer, not when it is ordered. Hence sales peak around when new number plates are released, even though the order must clearly be placed in advance. This is an important distinction, because if OEMs can’t deliver vehicles swiftly then existing demand can be underestimated if we judge on sales figures alone (and waiting times are generally high for EVs across the industry).
What do BEV sales in the UK look like?
Looking at the sales stats of those vehicles that are eligible for the £4.5k BEV PiVG (i.e. excluding the Plug-in Hybrid and Range Extender EVs), we find that the Nissan LEAF is the clear winner. It accounts for about half of all BEVs ever sold in the UK, having sold something like 3x as many as its closest rival BEV.
Anything pertinent changed in the BEV sales world in the period in question?
The key clue in the article is that the “new model of the Nissan LEAF, Britain's top selling pure electric car, was only delivered to owners at the end of January”. This is almost true (actually start of Feb), but it doesn’t perhaps have the emphasis required. The very first new model Nissan LEAFs were delivered at the start of February, but volume deliveries only really commenced at the start of March. Furthermore, no older models were being delivered for a time either.
A challenge in business is how to manage the roll out of your new shiny, shiny product. Announcements can seriously compromise sales of the existing product. So you don’t want to hold too much older stock. Nissan therefore scaled down UK allocation of the LEAF at the end of 2017. But, with demand for the 2017 LEAF higher than anticipated, Nissan sold the lot, leading to a short gap in deliveries in the months preceding the 2018 launch.
What can we conclude?
Taking into account the above, what do you think would happen to the UK’s BEV sales figures when the number one selling BEV can’t be delivered for a month or two? The Times answer that this “may have affected sales”. Well yes. But how exactly could removal of the top seller not have “affected sales”?! I’d deem that effort worthy of a bronze star at best.
So, yup. Nothing to see here with this quirk of a key product delivery. More interesting will be what happens to sales with the new LEAF, complete with higher range and better performance, released into a world of ever improving charging infrastructure. The figures banded about are that we expect sales to circa triple. Yup. Triple.
And that’s just the LEAF. Don’t forget the imminent Jaguar iPace, the Audi Sportback and Quattro etrons, the Tesla Model 3 and more. The age of the high range BEV is dawning across the market segments over the next couple of years.
This rapid uptake of EVs will be a real story. If you’ve not already, you really should get involved...