Study Forecasts EVs to Overtake Hybrids in U.K. by 2020

Hybrid-electric vehicles will represent the dominant “green” powertrain technology in the U.K. until 2019, after which they will be overtaken by sales of all-electric vehicles, a new study predicts.

U.K. registrations of alternative-fuels vehicles in 2020 will be about 2.4 million units, of which 11%, or 274,000, will be EVs and 10%, or 235,000, will be HEVs, forecasts Glass’s Information Services Ltd. in its “Alternative Powertrain Vehicles in Europe” report to be published this month.

The study predicts the combined 21% market share for EVs and hybrids in the U.K. in 2020 will be lower than in Germany (26%) but the same as in France and Italy.

Of the five largest markets in Europe for car sales, Spain is expected to see the lowest adoption of green-car technologies by 2020, with a combined share of 20% for EVs and HEVs.

A key issue for many European auto makers that face increasingly tough targets for reduction in their overall carbon-dioxide emissions is the proportion of EVs that make up their overall sales mix.

“One of the central issues for the vehicle manufacturers is encouraging consumer adoption of electric and hybrid vehicles, including plug-in hybrids,” GIS Managing Director Andy Carroll says in a statement.

GIS says the industry still is developing the best way to deal with predicting the residual value impact of the cost of batteries, the risk of substitution with improved technologies and end-of-life disposal/secondary-use options.

Remove battery’s residual-value risk to encourage EV adoption, study says.

The residual value of an EV largely depends on its relative total cost of ownership compared with other alternative-powered vehicles and the newer models entering the market when it is first sold as a used vehicle, the company notes.

In order to encourage adoption, GIS suggests auto makers will need to develop strategies to remove most of the residual value risk of the battery from the consumer.

The study recommends a number of alternative strategies that could be adopted by auto makers to achieve this, depending on whether a consumer purchases or leases the vehicle.

These include long warranty periods of eight or more years and developing battery buy-back schemes that allow early adopters to swap the battery units for newer technology at a reduced cost.

It also suggests auto makers lease the battery, effectively underwriting some of the residual value risk, though it adds this raises “shared ownership” issues that would have to be resolved by the industry.