While electric vehicle marketing focused squarely on early adopters at the dawn of this burgeoning EV age, the next wave of adoption might not come from private buyers at all.
A window into what the next five years of electric vehicle sales could look like in the US was provided this week by the UK-based Society of Motor Manufacturers and Traders (SMMT), which noted that in 2020, businesses and large fleets had bought roughly twice the numbers of EVs than did private buyers. That’s both good and bad.
The figures the SMMT cites could come as a surprise to EV enthusiasts in the States: 2020 saw 4.6% of UK private households purchase battery-electric vehicles, compared to an impressive 8.7% for fleets and other businesses. The takeaway is largely encouraging, but it also indicates that the UK views private EV sales as flattening out.
“While last year’s bumper uptake of electric vehicles is to be welcomed, it’s clear this has been an electric revolution primarily for fleets, not families,” said Mike Hawes, SMMT chief executive. “Manufacturers are committed to the consumer, reducing costs, and providing as wide a choice as possible of zero-emission capable vehicles with many more to come. To deliver an electric revolution that is affordable, achievable, and accessible to all by 2030, however, government and other stakeholders must put ordinary drivers at the heart of policy and planning. We need incentives that tempt consumers, infrastructure that is robust, and charging points that provide reassurance, so that zero-emission mobility will be possible for everyone, regardless of income or location.”
These figures are impressive for another reason as well: 4.6% is roughly double the rate of adoption in the US for the same year, with the States lagging behind a number of other EV-friendly countries despite being the home of Tesla. Of course, even at 4.6%, the UK has a long way to go toward the 2030 goal of phasing out sales of gas- and diesel-engined cars, but the target itself is already motivating businesses to look more seriously at EVs with the help of tax incentives.
The SMMT’s full report offers a number of suggestions that could encourage private EV purchases on the wider scale that could be applicable in the US.
“Businesses and company car drivers currently receive stronger and longer-lasting motivation through reduced purchase taxes and fiscal incentives compared to consumers,” the SMMT noted. “Both, however, felt the cut to the Plug-in Car Grant (PiCG) last week, the effect of which will add £500 to the cost of every BEV under £35,000, and £3,000 to those costing more than £35,000, as the grant is removed from electric vehicles over that price. By comparison, private buyers in Germany receive a €9,000 grant towards a new BEV, while Dutch drivers do not pay VAT on BEV purchases, equivalent to a purchase cost saving of around a sixth.”
The US has the opposite problem at the moment: Offerings for commercial buyers, including panel vans and delivery vehicles of all sizes, are lacking, a few high-profile orders from UPS and Amazon notwithstanding. Similarly, EVs tailored specifically to the small business have yet to materialize—though the same holds true in the UK, suggesting that consumer EVs are being bought by businesses all the same.
Why is the UK still a useful example when it comes to EV adoption here?
For one thing, it faces many of the same challenges as the US when it comes to charging infrastructure. About one third of car owners in both countries lack access to a dedicated overnight charging spot, effectively omitting them as possible EV candidates without a surge of widely available curbside charging—another area where the US is only just getting started.
“At least 1 in 3 households rely on on-street parking as they have no driveway or garage and still more have no designated off-street parking,” the SMMT notes. “Savanta ComRes research has found that 28.3% of drivers are put off switching to an electric vehicle because they would have nowhere to install their own charge point. To ensure those living in accommodation with no location for a dedicated charging point can join the electric revolution, there must be a commitment to expand on-street public charging in residential areas.”
It remains to be seen whether the US will be able to enable businesses large and small to switch to EV purchases with the help of incentives, charging infrastructure, and variety. At the moment it’s perhaps the third factor that’s the most pressing.
Will EV sales among small businesses outpace private EV purchases in the US in the next five years? Let us know in the comments below.
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