The trade is going through tough times as a transition period to mass-market electric vehicle adoption is not being managed well, and Kyle Harris, managing director of Auto Logistic Solutions can’t help but think that the politicians have got it wrong. In a guest Executive View for Automotive Management he explains his reasoning.
In the final episode of The Grand Tour TV series, Jeremy Clarkson dared to express a view that I think many in the motor trade hold, but few voice openly. “They’re just white goods. They’re washing machines. They’re microwave ovens. You can’t review those. You can’t enjoy them. They are just sh*t.”
There’s a despondency here that is more than just ‘Clarkson sounding off again.” In his sign-off, he seems tired and worn out by the unremitting push from Brussels to put EVs front and centre of our vehicle sector for the foreseeable future. While we might all agree in principle that fossil fuels’ time as a viable source of energy needs to come to an end, there are practical problems with EVs that simply won’t go away, no matter how convincingly politicians, lobbyists and manufacturers put their case.
You see, the trouble is this; while the ‘men in suits’ keep pushing the EV mantra (backed up by European-wide legislation and sales targets), everyone I speak to in the supply chain have real concerns about the reality of driving, servicing and reselling battery-powered vehicles. And that’s without even considering the true environmental credentials of what is supposed to be the clean, green alternative to petrol and diesel powered cars.
Infrastructure, sales and targets
The UK government’s ongoing reticence to grasp the nettle and invest in a viable, nationwide EV charging network continues to provide end-users with little confidence. Drivers, lease companies and dealers still face the challenge of ‘range anxiety’. And until this barrier is overcome, widespread adoption is just a pipe dream.
Sales of electric cars in the UK grew in October despite overall demand for vehicles shrinking as manufacturers raced to meet government targets.
Carmakers sold 29,800 EVs in October 2024, up by a quarter compared with the same month last year, according to the SMMT. This growth came despite overall October sales falling by 6% year on year. Sales of diesels were down by a fifth and petrol cars dropped by a massive 14%.
While dealers are being pushed to sell more EVs to meet the Zero emissions Mandate, the relatively high price of cars and the ongoing niggles with charging access continue to frustrate progress.
When I talk to motor retailers and lease companies (off the record), I hear both groups complain about unrealistic expectations from manufacturers, who are keen to push units down the supply chain, without thinking about the plight of dealers and rental companies. As one lease company boss said to me: “Manufacturers are very keen to push EVs onto us as courtesy cars or run of the mill fleet vehicles, but our customers just aren’t interested. We are having to accept units that are literally sitting there as the market is not ready to adopt EVs as it stands in any significant numbers.”
The end result of this will be discounted rates for EVs in 2025. Great for drivers, but for the industry this is a disaster and shows how the poorly planned transition from fossil fuels to BEVs is playing out.
For fleet providers, this instability in the market really hampers their ability to predict future values (RVs), making it very difficult to set monthly rentals on EVs. While some lease companies may do well from the introduction of EVs, other may end up losing their shirts.
Servicing concerns
When I talk to garages and bodyshops, I hear a similarly despondent story about the practicalities of managing EVs that have been involved in accidents. In October of this year, the BBC reported a story about a Northamptonshire family’s EV that apparently self-combusted on the driveway, destroying the car and causing huge damage to the front of the house. EV fires are rare; however, they are rising as sales increase. In 2023 the UK saw 118 car fires that could be attributed to battery powered vehicles.
Recovery specialists are increasingly concerned about the collection of EVs that have been involved in accidents, which may have impaired the integrity of battery packs. While it’s unlikely, the risk remains that a damaged EV could go up in flames while being recovered, presenting a genuine risk to the driver and the recovery vehicle itself.
Similarly, bodyshop bosses tell me that safety rules stipulate that any potentially compromised EVs should be put into quarantine for several days, storing them several metres away from any other vehicles. This is a hugely onerous predicament for independent garages and bodyshops, in effect requiring them to have a completely separate, external location to store incoming, damaged EVs. Are you a bodyshop facing this challenge? How are you dealing with incoming EVs that may have been involved in an accident?
Pre-sales, RVs and values
Due to the tough EU targets manufacturers are facing approaching the 2040 deadline, the supply chain is being effectively forced to deal with an influx of EVs that don’t have customers. Often, dealers are encouraged to take on EVs as presale vehicles, purely to trigger their annual bonus.
While this is totally understandable from the hard-pressed dealer’s perspective, this pre-registration of EVs skews the market with an influx of cheap, nearly new battery powered vehicles that strangle off demand for new EVs on the forecourt. This in turn has a knock-on effect on the residual value of used EVs in the market. And given the uncertainty over the safety and cost of repair of EVs post-accident, this flood of ‘cheap metal’ onto the market has led the industry to ask, are EVs becoming uninsurable?
This staggering thought is one that has exercised the minds of dealers, rental companies, leasing businesses and insurers in recent months. There seems to be no simple answer to this uncomfortable reality. The law of unintended consequences looks set to take a big bite out of the rear end of the motor trade! If you’re an insurer, I’d love to hear your opinion on the challenge of uninsurable assets.
Big green con?
Lurking behind all of these industry-specific issues is the big green elephant in the room. Are EVs really so environmentally friendly, or are we just being pushed around by the political power of Brussels? I’m no climate change denier, but I hear so many apparently conflicting opinions about EVs and how they are going to lower carbon emissions and save the planet.
I am not totally convinced by the EV lobbyists, given the fact that I see largely unrecyclable precious metals such as lithium and cobalt being mined in huge quantities, desecrating areas of natural beauty. I also look at the UK’s power generation profile and see that in 2023, 33% of our electricity is still generated by burning fossil fuels. While 14% comes from nuclear, this will take 20 plus years to ramp up to any meaningful level. And while wind accounts for 36% of electricity generation, I personally think that hoards of turbines are an absolute eyesore, spoiling many areas of outstanding natural beauty in the UK.
I may have this all wrong, but I listen with sympathy to those who argue that EVs’ green credentials have been overstated. I agree with a lot of what Rowan Atkinson had to say in a recent article in the Guardian newspaper, when he said having been an ‘early adopter’ of electric vehicles, he felt duped by the industry.
Final thoughts
On reflection I can’t help thinking that our politicians have probably got it wrong. They jumped too soon towards battery electric vehicles without thinking through such details such as; how will drivers source power? how will we roll out a reliable charging network? how will we encourage drivers to switch? how do we help the automotive sector make this seismic shift? Crucially, there seems to have been little thought given to the motor trade and how it would manage the massive transition from fossil fuels to electric vehicles.
Experts tell me that in the long term, hydrogen power is probably the most viable answer and that electric vehicles will be a stepping stone towards this clean technology. I worry that this ‘transitional period’ is not being managed well and that many businesses will go through unnecessary pain or even fail due to poor planning and poor execution. I’d be delighted to hear your views on this complex and emotive issue.
I always try to be positive and optimistic, but right now I see a lot of those in the wider trade going through genuinely tough times. Our political masters have said ‘jump’ and we’ve all had to toe the EV line. In the final analysis, we don’t have much choice in the matter, but the architects of this grand plan don’t appear to have given the details much consideration!
For me, if we had a completely green source of power (nuclear?), a reliable charging infrastructure, improved vehicle range and significantly lower purchase prices, I’d certainly give EVS a try. However, the other issues of raw material sourcing (and its impact on the planet), the recyclability of EV battery packs and the challenges of vehicle insurance do not make me hopeful.
I’d be delighted to hear your take on this complex issue that is stressing us all out at the moment, especially if you’re in the insurance market, the aftermarket or a main dealer grappling with some of these issues.
