What's going on with electric cars?
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
There are now more than 1 million electric vehicles on the UK’s roads, according to the latest data, but that milestone masks growing concerns in the industry about a lack of demand among households.
Sales of battery electric cars to private buyers fell by 25 per cent year-on-year in January, the Society of Motor Manufacturers and Traders has said. That is sales to consumers rather than businesses. Total sales of new electric vehicles grew by 21 per cent to 20,935 in January, but this was driven by a 42 per cent rise in the sale of cars to fleets and businesses, who can take advantage of tax breaks.
The table below shows the overall market for new cars in the UK in January, including diesel and petrol…
This is what Mike Hawes, chief executive of the SMMT, said about the data:
“The latest 2024 outlook for the new car market estimates a total overall volume of 1.974 million units, which is a 4,000 unit increase on the October estimate, but with the BEV [battery electric vehicle] forecast reduced to a market share of 21.0% over the year, compared with the 22.3% anticipated in October and the 23.3% expected a year ago. While myriad factors such as high energy prices, inflation and interest rates, charging anxiety and mixed messaging from government have restricted demand, 100,000 more BEVs will still reach the road in 2024 compared with last year, totalling some 414,000 units – more than one in five new cars. This volume would increase even further if a VAT reduction on EVs was introduced.”
You can find all the sales data from the SMMT, the industry trade body, here
Meanwhile, a House of Lords committee has published a report on the UK’s electric vehicle strategy and called for significant improvements from the government. The government has said that the sale of new petrol and diesel vehicles should end in 2035. However, the Environment and Climate Change Committee said that progress was “not happening first enough” and outlined a series of “major barriers”:
These are the committee’s key recommendations:
You can find the full report from the committee here
Here is some other news that highlights the challenges facing this sector - the UK operations of the electric van maker Arrival have been placed in administration, putting up to 200 jobs at risk. Arrival was once considered one of the bright hopes for the future of the electric vehicle industry. You can read more on that in a BBC story here
For further reading on this I recommend signing-up to the excellent The Fast Charge newsletter, which focuses on the latest news in the electric vehicle industry. You can find that here
Podcast…
The latest episode of our Business Leader podcast features an interview with Marc Allera, the chief executive of EE and BT’s consumer business, one of the largest in the UK. Marc Allera explains how EE went from being an upstart mobile phone brand to a key part of BT and a business with big ambitions for the future. Plus he explains what he learned from launching Sega’s Dreamcast games console and mobile phone brand Three in the early 2000s, which had mixed success.
You can listen to the episode via Substack here, Apple here or Spotify here
Other stories that matter…
1. The chief economist of the Bank of England has raised expectations that it will look to cut interest rates this year. Huw Pill’s comments come after Andrew Bailey, the governor of the Bank, suggested last week that even if inflation got back to 2 per cent (the official target for the UK) he would be reluctant to cut interest rates without more evidence of inflation sticking at that level. However, Pill said in an online Q&A yesterday that it is a matter of “when” and not “if” interest rates are cut. He said: “Lower interest rates are a reward to the economy for better inflation performance. It is the focus on when, rather than if, I think, that has been what the governor has tried to focus on.” You can read more here
2. Retailers are struggling to manage the rising costs associated with online home deliveries and returns, according to a new report by Retail Economics, the consultancy. More than one in three retailers plan to increase their delivery charges this year, according to the report. You can read more in a story by The Times here
3. “The accountability sink” is a growing challenge for businesses, according to a new book called The Unaccountability Machine. The use of rule books, procedures and artificial intelligence means it can be difficult to trace who is responsible for a decision. Stephen Bush argues in a new column for the Financial Times that this is a not bad thing. “I would much rather subject myself to the occasional unfairnesses of the average rule book — which in practice is all an algorithm is — than to unrestrained human decision-making,” he writes. “But for leaders, whether of companies or states, explaining what has gone wrong in machine-aided decision-making will mean being able to speak fluently about what accountability sinks mean, why we have them and whether we should get rid of them.” You can read more here
4. The Wall Street Journal has looked into who is actually buying Apple’s new $3,500 (£2,800) Vision Pro headset. The answer is die-hard Apple fans who want to be part of history. You can read more here
5. Business leaders need to understand the power of boredom to generate creativity among their team, according to a new report by Manfred F. R. Kets de Vries, a leadership professor at INSEAD, the Paris-based business school. “Being bored tells us that we need to find fresh ways to rejuvenate our senses through introducing new activities into our professional and personal lives.,” he writes. You can read more here
And finally…
Congratulations to all the restaurants around the UK and Ireland that have been awarded Michelin awards. Michelin revealed its latest collection of starred restaurants at a ceremony in Manchester on Monday. You can find the list of new awards here and a list of all the restaurants with Michelin stars in the UK here.
Remarkably, two more restaurants in Cumbria have been awarded Michelin stars - Cedar Tree by Hrishikesh Desai in Brampton and Lake Road Kitchen in Ambleside. This means there are now 13 restaurants in Cumbria with Michelin stars, more than anywhere outside London. The culinary scene around the Lake District is a great example of how an industry and innovation can flourish in a cluster. You can find the list of Cumbria’s Michelin restaurants here
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Best
Graham