A motor museum in Frankfurt proved an interesting backdrop to discuss the future of electric vehicles. Experts from manufacturers, large fleets and cap gathered to discuss the challenges and opportunities presented by the move to low carbon motoring.

The session was led by Martin Verrelli, international business development director at cap, who welcomed delegates and encouraged an open debate to get the best from the day.

The discussions were lively and wide-ranging with the political, economic drivers of change fully explored.

It is clear that the change we expect is happening now. Electric vehicles (EVs) represented around 2% of registrations in Europe in 2017, an increase of 50% on 2016. The fastest adopters of the technology include France, Norway and The Netherlands. The rate of adoption will be accelerated driven by EU regulation.

The rate of adoption was a matter of lively debate with some expecting 15% of new registrations to be EVs by 2021 and others expecting this level of penetration to take well into the 2040s.

The success of EV adoption in Norway was highlighted. A mix of tax incentives, free services and usership benefits were underlined as the biggest driver of change. In 2017 39% of new cars registered in Norway were EV or plug-in hybrid cars.

The challenges of infrastructure were debated with the problems often unique to different countries and political environments. Undoubtedly EU regulation will drive the demand and supply of EVs. It was suggested that legislation may also be needed to speed up the charging infrastructure.

Matt Freeman, managing consultant from cap set out how CO2 reduction will drive change. While the current EV market is small, France, Germany and UK have seen rapid growth in market share, but EV is still a small percentage overall.

cap’s unique Global Code allows us to see the differences between countries and understand what does and doesn’t work.

Matt explained how there are a huge number of competing technologies. HEV is leading the market at the moment. A good remarketing strategy, identifying the key used market buyers for this technology, is increasingly important to ease the adoption of new technology by supporting residual values. He reminded the audience there is no new market without a used market.

In terms of new sales, the tide may have turned against PHEV as many were chosen for tax benefits and never plugged-in. However, for the right used buyer, PHEV could make sense, so it is important not to right off a technology based on its success in only one part of the market.

More choice will help to stimulate the market as will the growth of the charging networks. Investors in charging networks are becoming more diverse: in the UK a major retailer, Tesco, is planning on installing chargers in the car parks.

Dylan Setterfield, international forecasting manager at cap, argued that the provision of data on battery condition will be essential for maintaining accurate valuations for electric vehicles.

He suggested that more accurate forecasts and stronger residual values will support the growth in sales of electric vehicles, and called for the sharing of battery performance data to support values in the used market and reflect the true condition of electric cars in the used market.

The team of experts from cap demonstrated how it had developed a globalised approach that enables businesses, for the first time, to take a unified view of global trends, and see efficiencies across all operations that use new and used vehicle data. The unified methodology creates a future-proofed platform that will unlock the ability to share vehicle data across international boundaries.

In his talk, Dylan set out how in the next few years, the industry will see an explosion in the range of electric vehicles available in the new and used market alongside rising volumes. The market for used electric vehicles is still very much in development and buyers are still wedded to age and mileage as the core parameters to describe the value of a car.

The condition of the battery in an electric car has a direct relation to the real-world range, and as more cars come to market, the battery condition will become key to determining the true used value of an individual car.

The team from cap suggested that the data will evolve as closer work is undertaken with manufacturers and other partners in the industry to integrate information on the condition of the battery at the resale stage. It is almost certain that better performing batteries and the continuation of extended manufacturer warranties on batteries will be the key factors to drive higher values.

Delegates at the seminar heard how the launch of new real-time used vehicle valuation data in Germany had already demonstrated increasing accuracy. The values are based on big data that combines actual sale prices with expert analysis.

Market experts from the France and Germany cap analyst teams were available to share country-specific insight and explore the differences across the EU. Guillaume Heron, France forecast editor for cap, explained the tax and bonus system. France will see PHEV reintroduced next year with a government bonus of €2000 and €6000 for BEV. A scrappage scheme will also be launched.

Max Muller, manager of future values for cap in Germany set out the country’s plan to have 1m EVs on the road by 2020. He explained company car incentives and discussed the challenges facing the charging infrastructure network.

Mark Norman, a managing consultant from cap, discussed the depreciation trap with many buyers facing no risk due to PCP and PCP finance options, which account for over 80% new market in the UK.

He outlined that as the used market evolves over the next three years, buyers will have a great deal of choice. The roll-out of Clean Air Zones in the UK will undoubtedly drive both new and used demand. The UK is also seeing increasing numbers of specialist EV dealers, which are enjoying some success.

The advances in technology are expected to lower the cost of a new EV in the next decade, and stronger residual values will also help to reduce finance costs.

The level of insight and discussion on the day was stimulating for all delegates, and the response was very positive. As a result, cap is planning more events in 2019, and if you are interested in attending, please email us here