Robert Redman talks electric cars in today's market

Robert Redman

23 Feb 2018, Blog Post

It’s not often that politicians from all sides agree on something, but the need to switch Britain’s motorists into electric and hybrid vehicles is one issue that unites them all. In February, Transport Minister Jo Johnson went even further, pledging to phase out diesel trains as well as cars by 2040.

So fossil fuels are dead. Long live electric? Well not quite yet. Take up of electric and hybrid vehicles remain stubbornly low. While sales of diesel cars slumped by 17% last year, sales of alternative fuel cars (AFVs) – mostly hybrids and electric – were up by an impressive-sounding 38%. But the actual number of cars remains tiny compared to the overall market. AFVs accounted for less than 120,000 of the 2.5 million new cars registered last year.

So, what can be done to turn the tide in favour of electric and hybrid cars? Robert Redman, Car Editor at automotive intelligence provider Glass’s, believes the answer lies in educating buyers and sellers.  His radical proposal for getting more people to think about electric and hybrid cars is to start by forgetting about what powers the car.

“People come into a dealer saying they want to buy an electric car. But my advice would be to ignore the powertrain and ask ‘how is the car going to be used?’. You also need to think about where the owner lives. If they live on the 10th floor of a block of flats a pure electric or plug in hybrid is not going to be the right option,” he says.

“We are in the situation we are today because people were told to buy diesel – they were told it was always the right option. But that wasn’t always the case. Diesel is great if you do lots of long distances but petrol would have been better for people doing fewer miles. The important thing is to look at what people are actually going to do with the car.”

Redman says that using total cost of ownership (TCO) – often quoted by manufacturers as a benchmark – can also be misleading. “You need to look at reality, at the practicalities of what the owner is going to use the car for,” he says. Most of the TCO is made up of depreciation where the electrics and hybrids score well in most published tables. But to calculate a true depreciation rate, you really need to know the actual selling price of a given model. Given that discounting is rife on petrol and diesel cars, traditional tables which take the list price as the starting point are not showing the true depreciation rate for those vehicles. So, it may be that AFVs do not enjoy the TCO advantage that most tables claim.

Another key factor with hybrids is the use to which they are put. Driven around town on short journey, they certainly achieve much lower operating costs than a fossil fuel car. But Redman points out that using a hybrid for motorway driving will result in very high petrol costs which can skew ownership costs significantly.

In particular, he points out that company car benefit-in-kind tax charges have encouraged business drivers to opt for hybrids, where they can save two thirds of the tax compared to a diesel. But if they then use the car on long journeys they may get as little as 25 miles per gallon, less than half what a diesel would return for the same journeys.Turning

Although the range of electric cars is increasing – the new Nissan leaf can achieve 170 miles between charges – the availability of the charging points is something buyers must consider. Even if you have a driveway and a garage, the new Leaf will take 21 hours to fully charge if it is simply connected to a 13amp plug.

Retailers are increasingly providing charging points in car parks but they are limited in number and work on a first come, first served basis. Redman recounts an experience of finding two charging points at an Ikea store. One was out of order and the other was already being used by a Tesla. The store explained that the facility was provided by a third party so they could not reset the failed outlet. If his car had not been a hybrid, he would have been forced to abandon it overnight.

It’s the reality of situations like this that should drive choices, he says. In time there will be more charging points but for the time being buyers need to reconnoitre the facilities in their home area before buying an all-electric car. With three different plug configurations currently in use, they need to check that they can charge their particular vehicle. “Don’t forget that you will be charged for the electricity,” he says, urging buyers to check out various app-based providers, such as Ecotricity, to keep costs down.

Using your home electricity supply is a cheap way of powering your car. A full charge can give you 70 plus miles for around £1.50, a cost per mile well below any fossil fuel car. But Redman wonders aloud how long the government will hold off from treating electricity for charging as a road fuel and tax it accordingly. He recalls what happened to compressed natural gas (CNG). During its brief period in vogue, HMRC suggested that modified home gas supplies used for fuelling should be fitted with special meters to allow fuel duty to be charged. Given official enthusiasm for electric and plug in hybrid, the day when you have two electricity meters in your home may still be some way off.

Setting all these issues aside, Redman says the only way to approach buying a car and choosing a powertrain is to set aside any emotional feelings about going green and to be completely honest with yourself about how and where you will actually drive the vehicle.

For example, a household living in an urban area might find an electric car ideal for most purposes. But if a London family likes to holiday in Cornwall, what should they do? Car hire is an obvious option but Redman says some manufacturers are already developing new approaches to ownership where the driver can swap between vehicles for short periods. For example, someone who chooses an electric car would be able to book a larger conventionally powered vehicle for a long trip, returning it at the end of the holiday and picking up their electric car again.

“It’s like timeshare for cars,” says Redman. “More manufacturers will be bringing out schemes like this as electrics and hybrids become more common. But at the end of the day we have to get smarter about how people buy cars. Decisions have to be based in reality.” A great example of hard-headed business reality driving the switch to hybrids is the Toyota Prius. Its low operating costs have made it a firm favourite with taxi firms and strong demand from that sector is keeping residual values high, particularly at auctions.

Which rather proves Redman’s point that when buyers look at reality and make decisions based on the use to which they will put vehicles, electrics and hybrids can win out. 

About the author

Robert Redman

Robert RedmanForecast Editor

Robert is responsible for forecasting Glass’s future car values right across the market. He has been involved in the motor industry for almost 30 years, most recently as Passenger Car Risk Specialist in the Residual Value and Portfolio Department at Mercedes-Benz UK. He has also held key roles at Leasedrive, Masterlease, Vauxhall Masterhire,Leasecontracts,GE Fleet Services – and has also worked as a specialist classic car restorer.