2020 has sent profound shockwaves through much of the established wisdom and predictions in the automotive space. We have seen used cars actually appreciating in value, whilst battery electric vehicle (BEV) sales have grown 168% in market share year on year, in a market that has suffered a 34% contraction.
Here, our Client Services team review some of the impact 2020 has had, and what the next few years may hold.
Petrol and Diesel Continue Their Decline
While electric vehicles only represent a 5.5% market share of new cars, this represents a huge leap on previous years, and this trend looks set to continue. The extreme diesel and petrol vehicle sales contraction is undoubtedly a unique feature of 2020, but expect for the trend to continue, and accelerate in the next 3-5 years.
Electric is the Future – Official Government Policy
The UK government has now accelerated the pending ban on sale of new diesel and electric cars, as part of the new green initiative announced this month. This was mainly news as it was bringing forward the ban already announced for 2040.
What was new was that new hybrid vehicles will also be banned from 2035 in the UK, something that concerns manufacturers as they already struggle to make money from the electric vehicle market, so will need to either raise prices or increase efficiencies rapidly to match this pace of change.
New Car Sales Projections
Industry expert CAP HPI suggests we are unlikely to see a return to the previous high of 2016 in new car registrations.
2021 should return to something approaching 80% of 2019 levels. Within this, suggestions are the electric and premium segment of the market is likely to be somewhat protected, with the benefits of ‘green’ tax initiatives, particularly amongst company directors and businesses looking to maximise their employee benefit offering whilst saving money.