With Sales Booming, the UK Electric Vehicle Market is Projected to Register a CAGR of 12.7% during the Forecast Period
Published | 08 September 2021
With increasing awareness of non-renewable resources and carbon emissions and government financial aid and policies created to encourage electric vehicle adoption, the United Kingdom's electric vehicle market is growing substantially....
A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the UK electric vehicle market was worth USD 2.81 billion in 2020. According to the study, the market is estimated to grow at a CAGR of 12.7%, earning revenue of around USD 6.26 billion by the end of 2027. The growth of the UK electric vehicle market is attributable to increasing consciousness towards non-renewable resources and carbon emissions. The transportation sector is the primary source of air pollutants such as carbon monoxide, ozone, lead, and various nitrogen oxides. In light of this, the UK government intends to ban fuel vehicles within the next decade.
Moreover, the government is also providing financial aid to encourage people to adopt electric vehicles. It is anticipated that this factor will propel the market demand for electric vehicles in the United Kingdom besides boosting the market growth. However, the lack of sufficient charging infrastructure in the United Kingdom and self-sufficiency in oil, which keeps the fuel price comparatively stable, is expected to hinder the growth of the UK electric vehicle market.
Improving Electric Vehicle Battery Life Is Expected to Boost the UK Electric Vehicle Market
Battery power is improving and becoming less expensive as a result of the consistent efforts of EV battery manufacturers and technological advancements. Lower costs of batteries also influence the price of electric vehicles and make them more affordable to the general public. For instance, researchers at the University of Texas have developed a lithium-ion battery that does not contain cobalt in its cathode. Instead, it shifted to a nickel-based alloy with a high nickel content (89%) and manganese and aluminum as the other ingredients. Using this development, researchers hope to develop batteries that last longer and distribute ions evenly, while reducing cost. These factors are powering the growth of the UK electric vehicle market.
Increasing Development of Charging Infrastructure Is Favoring the United Kingdom Electric Vehicle Market Growth
Due to the increased number of electric vehicle drivers on British roads, it is significant that charging points at various locations should be more readily available so that journeys do not become impeded. There are currently more than 42,000 charging points spread across 15,500 locations. In addition to government investments, private entities are also investing in developing charging stations in the UK. For example, Royal Dutch Shell, an oil and gas multinational, has offered to develop up to 15,000 charging points across the UK. These factors are likely to boost the United Kingdom electric vehicle market in the forecast period.
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United Kingdom (UK) Electric Vehicle Market - By Segment
Market segments for electric vehicles in the United Kingdom include passenger cars, two-wheelers, three-wheelers, fleet utility vehicles, electric trucks, electric buses, and other commercial vehicles. The passenger car segment accounts for the largest market share with the growing support of the UK government. The government adopts stringent regulations related to vehicle carbon emission. Additionally, it offers subsidies for the adoption of electric vehicles, increasing demand for passenger vehicles in the United Kingdom. On the other hand, the commercial vehicle segment is also growing at a high rate, with the increasing penetration of public buses, trucks, and vans of electric vehicles.
United Kingdom (UK) Electric Vehicle Market - Regional Insights
Geographically, the United Kingdom (UK) electric vehicle market is segmented into England, Scotland, Wales, and Northern Ireland. England accounts for the largest market share as the number of registered electric vehicles in England is growing at a high rate due to the proliferation of charging points. Furthermore, as a result of this region's great potential, EV manufacturing brands are also launching their products. On the other hand, Scotland is also emerging as a potential market for electric vehicles, with over 26,000 licensed vehicles categorized as Ultra Low Emission Vehicles (ULEV). Intending to achieve a 75% reduction in greenhouse gas emissions by 2030, the Scotland government is putting tremendous efforts into promoting the adoption of electric vehicles among the general public as well as commercial use.
Impact of COVID-19 on the United Kingdom Electric Vehicle Market
The COVID-19-induced pandemic has had a negative impact on the United Kingdom electric vehicle market. The UK government imposed strict lockdown restrictions and social distancing measures to prevent the deadly coronavirus from spreading. The nationwide lockdown ended up hampering the production and distribution of electric vehicles. Furthermore, the lockdown also impacted the purchasing power of customers, which also resulted in the slower demand for electric vehicles in the UK market. The post-COVID-19 period, however, will likely see a rebound in the market due to increased environmental and sustainability awareness.
The leading market players in the United Kingdom electric vehicle market are BMW UK Ltd., Colt Car Company, Nissan Motor Manufacturing, Volkswagen Group UK Ltd, Renault UK Ltd, FORD UK, Mercedes-Benz Cars UK Ltd, Audi UK Ltd., Tesla Inc., Hyundai Motor UK Ltd., and other prominent players.
The United Kingdom electric vehicle market is highly fragmented, with several industry players with established brands. The companies significantly invest in R&D activities to improve the vehicle and battery performance for long-distance rides. They also offer a wide range of products as well as services to cater to various customer needs. Furthermore, competitive strategies like mergers, acquisitions, partnerships, collaborations, etc., are prevalent in the market to help market players gain a competitive edge.
The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the UK electric vehicle market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the United Kingdom electric vehicle market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.
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