TODAY’S STUDY: WHO USES PLUG-IN CARS AND WHY

Uptake of Ultra Low Emission Vehicles in the UK; A Rapid Evidence Assessment

August 2015 (Office for Low Emission Vehicles)

Executive Summary

Introduction

 This report presents the findings from a rapid evidence assessment undertaken to review recent research on the uptake of ultra low emission vehicles (ULEVs) relevant to the UK.

 The Government aspires that by 2040 every new car in the UK will be a ULEV and is facilitating this through a range of measures including financial support to help consumers meet the upfront purchase costs of ULEVs, through the Plug-in Car Grant, and investment in a national charge point network.

 The objectives of the rapid evidence assessment were to review recent UK and international evidence in the following areas:

o the characteristics of current and future ULEV owners

o how ULEVs are being used and experienced

o the impact of public incentives and other key motivators and barriers to uptake of ULEVs

o current and future infrastructure provision for ULEVs

 The methodology followed Government Social Research guidance on the conduct of rapid evidence assessments. 295 UK and international evidence sources were initially identified and assessed, then 45 of these were reviewed and analysed in detail.

 Overall, there are still significant gaps and limitations in the evidence base on ULEVs but also some new sources of evidence from countries with more developed ULEV markets, and opportunities for future research.

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The ULEV market in the UK

 The ULEV market in the UK has recently undergone a significant expansion, and in the last quarter of 2014 and first quarter of 2015 they represented over 1% of new car sales for the first time.

 PHEVs currently account for around two-thirds of ULEVs being sold in the UK, and BEVs a third.

 ULEVs represented a similar proportion of new car sales in the UK in 2014 as they did in the US, France and Germany, while California (3.2%) and Norway (17.8%) had two of the largest EV market shares globally.

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Current and future ULEV owners

 Most private EV owners are currently middle-aged, male, well-educated, affluent, and live in urban areas with households containing two or more cars and with the ability to charge at home.

 Looking ahead to the next 3-5 years, and based on insights from more developed EV markets, the basic socio-demographic profile of EV owners in the UK is not likely to change significantly.

 The evidence suggests more people in this same demographic are going to start buying EVs, and some people with similar demographics are likely to start buying them too.

 Identifying specific segments of future EV owners, who can be characterised in terms of their attitudes as well as their demographics, is more challenging and no evidence identified in this rapid evidence assessment provides an off-the-shelf model.

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 Based on the available evidence there are likely to distinct segments of future EV purchasers in the UK, all sharing similar demographics, but characterised by either strong pro-environmental attitudes, the desire to save money on fuel costs or an active interest in new technology.

 Most fleet EV owners are currently private sector businesses, working in a range of industries, with fewer than 500 employees and a small-medium sized fleet.

 The identity of fleet EV purchasers in the next 3-5 years is uncertain, and there is little evidence on which to base future projections. Many organisations appear to have initially bought one or a small number of EVs in order to assess their suitability for their wider fleet.

 Private sector businesses are expected to continue to represent the bulk of future EV fleet owners but further research is needed into: the extent to which an initial EV purchase is leading on to largescale purchasing; and the potential for more organisations with larger fleets to start buying EVs.

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Usage and experiences of ULEVs

 EVs are typically being used as the “main car” in private owner’s household, relied on for the majority of day-to-day journeys to work, education and other local destinations. Other cars in the household are typically being used for infrequent, longer journeys.

 Despite early predictions that EVs would only be driven for low mileages, recent research in the UK and other countries indicates privately owned EVs are being driven for comparable mileages to ICE cars.

 Private owners charge their EVs primarily overnight at home and currently have a strong preference for doing this rather than using public or workplace charging.

 Most private owners are satisfied with their EV and positive about buying another in the future. This appears to be underpinned by EVs’ performance, comfort, low fuel costs, and the ease and convenience of home charging.

 Range is still the greatest perceived downside of EVs for private owners, but this needs to be seen in the context of the overall high levels of satisfaction with the EV ownership experience.

 Evidence on how EVs are being used by fleet purchasers is more limited but what there is suggests they are being regularly used, driven for high mileages and, when being used as a pool car, charged mainly at the workplace.

 Fleet purchasers are generally positive about the experience of using EVs but, for some, EVs aren’t seen to offer the flexibility necessary to meet their needs and not all may be willing to proactively change their operations in order to incorporate them.

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Impacts of public incentives

 Separating out and accurately quantifying the impact of public incentives is not currently possible, and is always likely to prove challenging.

 Private and fleet EV owners in the UK indicate the PiCG was important in reducing the upfront costs of EVs, and in the case of some fleet owners, the additional benefits they can qualify for has been an active motivation for them to buy an EV.

 International comparisons suggest a positive relationship between financial incentives and EV uptake but there are confounding examples (of countries with high incentives but low EV uptake) to this.

 Other factors, notably measures which accrue ongoing benefits to EV owners during ownership have been found to mediate the relationship between financial incentives on EV uptake.

 Features of financial incentives themselves (other than how big they are) can also play significant roles in mediating their impact on EV uptake, including when incentives are introduced, levels of incentives for different types of EV and different types of purchaser, and whether incentives extend to leasing EVs.

 The evidence also suggests that a package of well-designed financial incentives plus non-financial incentives (and possibly also investment in public charging) may be the most effective means of increasing EV uptake.

 There is insufficient evidence to date to draw any firm conclusions about the impacts of reducing or withdrawing incentives on EV uptake. The one precedent for this in the Netherlands suggests that withdrawing incentives when an EV market is still in the early stages of developing and price differentials between EVs and ICEs are still significant is highly likely to have a negative effect on this development.

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Other key motivations and barriers

 The most important factors that private and fleet car buyers take into consideration when choosing a new car are costs – both purchase price and running costs – as well as size, style, reliability, comfort, engine power, design and safety.

 Private EV owners most commonly cite the following motivations for buying an EV: saving money on fuel costs; environmental factors; and interest in new technology.

 The most commonly cited barriers to private car buyers buying an EV in the future are: range concerns; purchase price; and a lack of knowledge about/familiarity with EVs.

 The most commonly cited motivations for buying an EV for fleet purchasers are: financial factors; and environmental factors (linked to CSR).

 The most commonly cited barriers to fleet purchasers are largely the same as those for private car buyers: range concerns; purchase price; and a lack of knowledge about/familiarity with EVs.

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Current and planned infrastructure provision

 Public charging provision is seen to have two overlapping but different roles: meeting the needs of existing owners and addressing the concerns of potential future EV owners about buying an EV.

 Existing EV owners rely mostly on home and workplace charging but consistently report a desire for more extensive – and fast – public charging to enable them to undertake longer journeys.

 The evidence also suggests that additional public charging infrastructure can help to address the range concerns of potential future EV owners and increase EV uptake.

 Current public charging provision in the UK is comparable, even favourable in certain respects, to provision in countries with more developed EV markets.

 But additional evidence is needed in order to address key questions about how much more public infrastructure will be needed in the future in the UK and where this new infrastructure should be in order to maximise its impact.

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Implications and priorities for future research

 More up-to-date evidence is needed on the characteristics, behaviours and attitudes of current EV owners in the UK. In order to keep pace with the rapid development of the market and inform future policy making aimed at supporting the growth of the EV market in the UK, evidence on EV owners should ideally be collected on a continuous or semi-regular basis.

 Representing fleet owners and users should be a priority for future research in order to address the many existing gaps in the evidence on their characteristics, attitudes and usage of EVs. This would help to assess the effectiveness of incentives and other policy measures targeted at fleet owners and inform their future design.

 Additional research is needed to understand the differences between BEVs and PHEVs - in terms of who buys them, how they are used and experienced - in order to help to inform future infrastructure provision.

 Other priorities and opportunities for future research include: o research to better characterise different segments of current EV owners

o collecting additional insight into the role of diffusion in the uptake of EVs

o research into the nature and extent of longer-term EV ownership issues, such as battery life, maintenance and resale value o choice experiments or local trials to test how new car buyers would respond to different packages of financial and non-financial incentives

o further analysis of charge point utilisation rates in different types of geographical setting

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