New research by NTT DATA UK, an IT services and consultancy provider for the automotive industry, confirms an upward trend in greener purchasing habits amongst UK car buyers.
The figures show that nearly two-fifths (39%) plan to buy an electric vehicle (EV), hybrid EV, mild hybrid EV or Plug-in hybrid EV with their next purchase, while only 13% of respondents plan to acquire a diesel vehicle.
Sustainability has become a hot topic in the automotive industry. With ambitious plans to reduce the UK’s CO2 emissions by at least 68% by 2030, the automotive industry has a crucial role to play. Earlier this year, the UK government launched a £20 million (€23.27 million)research and development competition, calling for innovative ideas for zero-emissions vehicles.The competition is part of its commitment to phase out petrol and diesel cars and vans, and for all vehicles of this type to be zero-emission at the tailpipe by 2030.
NTT DATA’s research revealed a palpable shift in purchasing habits, with nearly two-thirds (64%) of those who previously purchased a diesel vehicle looking to transition to electric. This shift is attributable to multiple factors, including the recent ban on the sale of diesel vehicles by central UK government by 2030, improvements in electric and hybrid vehicle performance, and the wider environmental trend towards being greener.
Consumers believe electric cars are unaffordable
Electric vehicles are only becoming more popular, but there is one disrupting factor which continues to dissuade consumers. Electric vehicles have long been considered more expensive than their equivalent combustion engine models because of the fixed price of batteries. Research showed that whilst 58% of respondents who earn over £60,000 (€69,820.10) per year are planning to buy an electric car, only 34% of respondents earning under £30,000 (€34,910.05) per year have the same intentions.
While the over 55 age group have previously been hesitant to buy electric vehicles due to ‘range anxiety’, now more than half (57%) of respondents in this age group plan on buying an electric vehicle.
Meanwhile, only 35% of 18 to 25-year-olds intend to do the same. Gen Z are often touted as the ‘Climate Change Generation’, yet the upfront costs of buying an electric vehicle are acting as a barrier. To tap into this younger, under-serviced market, the automotive industry needs to consider alternative purchasing models, such as shared ownership, or introduce more innovative financial products such as subscriptions to provide more options for these consumers.
Shopping habits will remain the same
Despite the drive towards a greener future, shopping habits look set to remain largely the same. One change, though, is a growing trend away from showrooms and test drives; only 70% of respondents who plan to purchase an electric vehicle want to arrange a viewing at a dealership showroom and test drive the car before proceeding with a purchase.
This means almost a third of those planning to buy an electric vehicle are happy with the information available online and have no desire to test drive the car before purchase. The research also found that just 34% of respondents will purchase a new car within the next two years, with the majority (60%) planning to purchase a new car in more than 36 months’ time.
Nick Smith, head of manufacturing, automotive and services at NTT DATA UK comments, “The results of this research confirm that the automotive industry is experiencing a shift in consumer preferences precipitated by social and product changes. Consumers are changing their purchasing habits and understand the need, and benefits, of transitioning to electric vehicles. However, younger buyers are being locked out of purchasing electric vehicles, largely because of their expense.
“It’s clear that the automotive industry needs to consider how electric vehicles can be made more affordable for young buyers. There is growing demand for electric vehicles and dealerships must react accordingly. Introducing varied purchasing models is one option for enabling the industry to tap into this younger market, and may also convert current non-purchasers into potential buyers.”