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EV Downturn

There doesn’t seem to be much doubt about it now – the switchover to electric is faltering. The main motor industry trade body in the UK, the Society of Motor Manufacturers and Traders, recently reported that in November 2023, fewer pure electric cars were sold than in the same month the previous year. Sales were down a whopping 17.1%, a remarkable decline. Falling sales of pure battery electric vehicles were, however, accompanied by big increases in deliveries of hybrids and plug-in hybrids.


Although it’s possible that this is a short-term setback, the Office for Budget Responsibility (OBR), the government’s official independent forecasting organisation for the economy and the public finances, has also downgraded its longer term forecast for the take-up of electric cars quite drastically. In March 2023, the OBR was forecasting that EVs would account for 67% of UK sales in 2027, but in November, it cut that forecast to just 38%, not much more than half of the previous figure.


So what are the reasons for the slowdown? It has been suggested that the high rates of growth in EV sales so far have been driven by affluent and enthusiastic early adopters, and there is bound to be a slackening of momentum as the switchover starts to extend beyond this group. I suspect that some buyers are also starting to hedge their bets a bit. Some may feel less pressure to go electric after the government decided to shift the deadline for ending sales of petrol and diesel cars from 2030 back to 2035, and some will have been put off by the continuing reports of problems with public EV charging infrastructure, which may also be behind the increasing sales of plug-in hybrids.


But if the customer side of the EV switchover is looking a bit grim, there is much more positive news on the industry side. Nissan has added to its already ambitious UK EV plans with an announcement that along with its battery partner Envision, it will invest £2 billion to bring electric versions of the Juke and the Qashqai into production here, and establish a third UK EV battery factory. More good news followed when the EU decided to defer for three years new local content rules that would have meant many EVs exported from the EU to the UK and vice versa would have attracted steep tariffs, to the detriment of European companies and to the advantage of challengers such as the Chinese.


And there is no better example of the challenge to European car makers posed by Chinese companies in the EV market than the just-launched BYD Seal, which I had the chance to drive recently. I think most people have a growing awareness of the strength of the Chinese motor industry when it comes to EVs but also imagine that the Chinese are all about competing with cheaper cars on value for money. It’s true that MG, to take the most obvious example, has made big inroads into the UK market with its keenly priced mainstream estates, SUVs and hatchbacks, but how many people are aware that a lot of new electric Volvos, Polestars, and Teslas sold here are made in China as well?


If those cars show that UK customers will accept premium products from China sold under a familiar brand, I’m pretty sure the BYD Seal is going to show that they will also happily buy a premium Chinese product with a (so far, to them) unfamiliar Chinese badge – it’s that good. BYD is already selling the smaller Atto 3 SUV here, but the Seal is a much more serious, grown up affair that needn’t fear comparisons with strong competitors like the Tesla Model 3 or the Hyundai Ioniq 5 and 6. The Seal has a sleek body with an exceptionally low drag coefficient of 0.219, and acquits itself pretty well out on the road. The interior is especially impressive, sporting an understated classy high-tech look with decent materials, while avoiding the slightly ‘bare’ effect of the Model 3’s tasteful cabin. Pricing is well into premium territory, at £45,695 for the rear-wheel drive version, or £48,695 for the powerful dual motor all-wheel drive, but still represents decent value.


As for that unfamiliar-to-the-British Chinese badge, it’s actually very well known in many other countries, not least because BYD is already vying with Tesla to become the biggest manufacturer of electric vehicles in the world. Expect it to become a lot better known here as well.

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