The automobile industry has undergone a dramatic shift in the past couple of years. Public concern over air pollution has forced a complete rethink of the traditional gasoline powered engine. As a result, we now have many more options when it comes to what type of car to buy – and which part of the industry to support. But what are the best options when it comes to the type of car we should buy now, and over the next decade?
Why not stick with what you know?
Petrol – and, in particular diesel – cars have brought some serious environmental and health issues to the UK. The air in our towns is now significantly polluted with nitrogen dioxide, which is incredibly toxic. It may seem like an issue only for those with environmental concerns but air pollution has serious consequences and is responsible for 23,500 premature deaths in the UK every year. Although the EU responded to this worldwide crisis by setting strict rules on nitrogen dioxide in 2000 this did very little to reduce the crisis thanks to the actions of the auto industry. Diesel vehicles produced by carmakers were designed to show acceptable levels of emissions in the test centres to comply with the EU rules but then emitted much higher pollutants outside once in normal use. So, change is well overdue.
What type of car to get now?
The cost of financing an electric vehicle has fallen in the past year or so, which has made it a more feasible option for drivers who want eco-power. It’s an option that makes particular sense for drivers in London who can avoid the £11.50 a day congestion charge with an electric vehicle. However, outside of the capital – and other urban hubs – it’s still a challenge for a number of reasons:
Range anxiety – electric car batteries go further than they have ever done but still not far enough for some. The Renault Zoe, for example, now has a top range of 180 miles on just one charge.
Charging points – the UK’s charging infrastructure has grown to some 5,000 public locations. However, more street and lamp post chargers are likely to be required to ensure full ease of use.
Cost – buying an electric vehicle outright still generates a considerable cost but leasing options are starting to make ownership more viable. The concern for many is the speed at which EV values drop – a single development in battery technology, for example, could mean that the value of old cars drops through the floor.
What type of car to get now: a hybrid. For many people who are keen to reduce their environmental impact a hybrid car is a good first step.
What type of car to get in five years?
There are already 130,000 electric vehicles on the UK’s roads and a choice of 60 different models for consumers. However, issues remain and the relatively small size of the market has kept costs high. This is all set to change with carmakers hatching ambitious plans to flood the market with battery and electric vehicles that will be competitively priced.
According to researcher LMC Automotive, electric car sales will account for around 10% of global auto sales by 2025.
Battery costs are declining rapidly, causing all carmakers, not just environmentally driven brands like Tesla, to start producing their own models.
General Motors Co. has planned to release 20 models by 2023 and Toyota Motor Corp 10.
Over the next five years, 127 battery-electric models will be released onto the market.
Since 2013, electric vehicle charging infrastructure across Europe has grown by 30 – 60% every year. By 2019, all new houses in the EU countries must have an EV charging port, according to new regulations – that will be 10% of all buildings and parking space by 2023.
What type of car to get in five years: many consumers will still hesitate over an electric vehicle in five years time but costs will likely be lower, choice increased and infrastructure growing to support it.
What type of car to get in 10 years?
It’s in 10 years time that many predict the electric vehicle market will reach its tipping point. That’s the moment at which the mass market of car buyers turns its collective gaze towards electric as a realistic option.
According to Bloomberg New Energy Finance, EVs will reach price parity with gasoline-powered cars by 2029 or earlier, which will be the moment at which many consumers seriously consider an electric vehicle as a competitive choice.
Carmakers don’t want to be left behind – in a decade, the gasoline powered car could be as out of date as a horse and cart.
Charging is set to become faster. BMW, Daimler, Ford and Volkswagen are already collaborating on an ultra fast charging network that will be rolled out across Europe over the next 5-10 years.
The charging infrastructure should be sizeable by 2028 – electric charging points are set to outstrip the number of petrol stations in the next few years and soon every supermarket, railway station and hotel will have them.
The figures will soon make sense. There are already multiple incentives for businesses to support electric vehicle charging infrastructure (e.g. a £600 subsidy where companies install double charging points) and reducing the cost of public charging is a key target for government over the next decade.
What type of car to get in 10 years: an electric car. By 2028 you won’t have to choose an electric vehicle on principle, as the numbers will make sense too. By 2040 he UK intends to ban the sale of all petrol and diesel vehicles, but other countries intend to move more quickly (e.g. Norway by 2025 and Netherlands by 2030).
Amanda Gillam is Solution Loans's General Manager and has been since 2009. She is also a prolific writer on personal finance issues, and has been quoted numerous times in articles published on 3rd party websites and in press releases. Her...Read more about Amanda Gillam