Fleet News

Glass's predicts hybrid cars will dominate powertrain technology until 2019

Glass’s is predicting that hybrid cars will represent the dominant ‘green’ powertrain technology until 2019, after which they will be overtaken by electric vehicle sales. 

Glass’s forecasts UK registrations in 2020 will be just under 2.4 million vehicles, of which 11% (274,000 units) will be electric vehicles (EVs), and 10% (235,000 units) hybrids.

As part of its report, Alternative Powertrain Vehicles in Europe, Glass’s predicts that the combined 21% market share for EVs and hybrids in the UK in 2020 will be lower than in Germany (26% of total new car sales) but the same as in France and Italy.

Of the five biggest markets in Europe for car sales, Spain is expected to see the lowest adoption of ‘green’ car technologies by 2020, with a combined market share of 20% for EVs and hybrids.

A key issue for many vehicle manufacturers, who face increasingly tough targets for reduction in their overall CO2 emissions, is the proportion of electric vehicles that make up their overall sales mix.

Andy Carroll, managing director at Glass’s said: ”One of the central issues for the vehicle manufacturers is encouraging consumer adoption of electric and hybrid vehicles, including plug-in hybrids.” 

The Glass’s report says that assessing the residual value of an EV largely depends on its relative total cost of ownership compared with alternatively powered vehicles and the newer models entering the market when it is first sold as a used vehicle – the methodology is, in principle, no different to assessing any other vehicle today.

Glass’s suggest that to drive adoption, vehicle manufacturers will need to develop strategies to remove most of the residual value risk of the battery from the consumer.

It recommends a number of alternative strategies that could be adopted by the vehicle manufacturers to achieve this, depending on whether the vehicle is being purchased by a consumer or leased, as follows:

  • Long warranties – long warranty periods (eight years +) are key. Create a standard for battery quality measurement linked to minimum charge levels (80% certified capacity or replacement).
  • Battery buy back – schemes allowing early adopters to swap the battery units to newer technology at a reduced cost.
  • Manufacturers leasing the battery – The manufacturer effectively underwriting some of the residual value risk on the battery, though this raises ‘shared ownership’ issues that need to be resolved by the industry.
Carroll concludes: “The basic framework for dealing with these issues remains pretty much the same, but how the industry responds to the battery residual value issue will be key to consumer confidence and the adoption rate of electric vehicles.”
 
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