Will 2022 drive the electric revolution?

The Year to Come

2021 has been a watershed moment for EV vehicles, not just in the UK but globally too. Approximately 11.65% of the new car market were EVs. 

Due to how fast this sector is developing it is hard to highlight exactly where we will be in 12 months time - but this should be seen as a positive. 2022 will need to not only replicate 2021, but we will need to see a quickening of sales, manufacturing announcements, infrastructure development and other supporting policies to ensure we build on, and accelerate from the progress made last year.

The start of the new year feels like a good time to try to break down the key developments we hope to see in 2022 which will help further this industry.

Manufacturing

More EVs than ever are set to be released this year giving a broader range of vehicles for consumers to choose from. Perhaps most crucially, an expansion of the electric SUVs available. Although EV sales were strong in 2021, SUV sales soared and  accounted for more than 45% of all car sales globally. In order to offset the carbon that these ‘gas guzzlers’ will be using, a broad selection of SUVs needs to be available in order to switch these customers over to the electric revolution.

We had a lot of positive news for manufacturing in the UK for 2021 and it is crucial that this continues to develop in the next year or else we risk being left behind by the rest of the world. To future proof the industry more announcements must be made this year.

The potential for new jobs and sector creation is highlighted by the upcoming industrial-scale battery recycling plants set to start running this year. Two industrial-scale battery recycling plants are set to start running in the Midlands this year. These show how new jobs can be created where old jobs may be lost and it is important that these new ventures that the EV market creates are exploited.

On the consumer side, Deloitte has predicted that this is the year we will see price parity between ICE vehicles and EVs. EVs cost less to run and maintain than their ICE vehicle counterparts but this is not always conveyed well and the initial cost to the consumer puts people off EVs. If, however, consumers do not have to calculate total cost of ownership, but can see savings from day one of their purchase - this will only elevate the consumer demand for EVs.

UK Policy

A big year for car sales means the government may be playing catch up to make sure the support for the EV takeover is there from the start. The government announced a Zero Emissions Vehicle Mandate which would give a sales target to manufacturers and be implemented in 2024. We can expect more details on this key policy this year with the finer details being hashed out and we may see a shorter timeline being announced due to demand being so high.

The key policy issue which is likely to be the main focus will be infrastructure. Although we have a good basis, the UK infrastructure is not keeping up with demand and that may start to slow growth in the coming year. The government - especially local governments - need to keep on making this a priority.

Further Afield

Looking abroad, the EU is launching its programme: fit for 55, a package of policy proposals with the aim of cutting their emissions by at least 55% before 2030. The proposals centre around setting more ambitious EU and national targets, as well as creating higher standards for sectors to abide by, as well as using support measures to help achieve these goals. 

A key goal looks to be an increase in CO2 emission reduction targets. Research from New Automotive shows there is limited evidence to suggest that CO2 regulations lead to manufacturers focusing on zero emission vehicles, which is the best way to reduce CO2 both in the medium and long term. Sales target policies such as the ZEV Mandate are much better at focusing manufacturers on the task at hand: having a zero emissions road transport network. The packages are still in the proposal stages and details are being debated on.

Although COP26 feels like it has only just finished, we are already looking towards COP27 being hosted in Egypt this November. We can expect Egypt to focus on renewable energy goals and advocate for the rest of Africa on climate finance - something that COP26 failed to get an acceptable deal on and will be crucial to ensure a global transition to zero carbon.

38 countries signed the pledge to end the sale of petrol and diesel cars in Glasgow. COP27 will be a good time to reflect on whether these countries have made any progress towards this goal, and campaign for a widening of membership.

So what will all of this mean for car sales in 2022?

New AutoMotive is predicting a doubling of the new car market in 2022 to some 300,000 cars which will equate to around 15% of the car market.

Although we welcome the growth this is much lower than what is possible. With the right policies and market incentives we could hope to see exponential growth of the market in the coming years. We at New AutoMotive are excited to continue using data driven solutions to drive this electric revolution!