Hybrid and Electric Cars - UK - December 2016
“From what can be considered as comprising a niche market, hybrid and electric cars are quickly establishing themselves as a fast-developing market. Stimulated by support from government and manufacturers, demand for these vehicles has led to them becoming the most dynamic segment within the UK car market. With support and innovation continuing, Mintel predicts further expansion with these vehicles becoming a common feature on our roads.”
– Neil Mason, Head of Retail Research
This report looks at the following issues:
- Plug-in hybrid electric market set for take-off
- EVs appear more of a long-term bet
- Dealers and the internet should be part of a wider communication strategy
Historically, the environmental benefits of hybrid and electric cars have been the main driver of sales. Added to this are the financial savings that are possible, best illustrated by their lower running costs compared to petrol or diesel vehicles. While the higher purchase price of a hybrid or electric car remains a major barrier, this too has been lowered in recent years through the availability of the UK government’s plug-in car grant. Worth up to £5,000 off the price of a qualifying car, the grant has helped with the affordability of going hybrid or electric.
An additional push for the market has come from the expansion in the number of models in segments such as ULEVs (Ultra Low Emission Vehicles). These have grown from 12 in 2012 to 38 by Q2 2016. As this market has continued to develop, many more manufacturers have entered. Yet despite this, segments such as ULEVs remain dominated by a small number of companies with Mitsubishi and Nissan accounting for over half of sales in 2015.
Mintel’s report on the hybrid and electric car market covers vehicles that are powered either wholly or in part by an electric motor and/or batteries as defined by the UK government. These vehicles are slowly becoming a feature of the UK car market although currently they still account for only a small percentage of vehicles on the road.
Five types of hybrid and electric car are included in this review:
- Hybrid Vehicle or HV (combining an electric motor with a traditional fuel such as petrol or diesel. The electric motor is charged using the motion of the car and will typically kick in at low speeds)
- Electric Vehicle or EV (a vehicle powered, in part or in full, by an electric motor and battery that can be plugged into the mains or a charging point)
- Plug-in Hybrid Electric Vehicle or PH-EV (a vehicle with a battery and an internal combustion engine (petrol, diesel etc). Power from the battery is supplemented with power from the internal combustion engine. Once the charge of the battery is exhausted the vehicle operates as a hybrid. The battery can be plugged into the mains or a charging point)
- Range Extended Electric Vehicle or RE-EV (a vehicle powered by a battery with an internal combustion engine powered generator on board. Once the charge of the battery is exhausted the internal combustion engine takes over. The battery can be plugged into the mains or a charging point or charged by the internal combustion engine)
- Fuel Cell Electric Vehicle or FC-EV (a vehicle that uses hydrogen gas as a fuel, which is stored in a compact, strong, but lightweight pressure tank. Power is generated by the fuel cell stack and is used to drive the FC-EV’s electric motor, with additional power supplied when needed from a secondary battery)
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