New research from Baringa Partners, published on World
Environment Day, reveals that more than a third of Brits would be
willing to pay more to get a 100% electric car than a similar
petrol or diesel one. However, Baringa is urging the Government
to ensure subsidies remain in place until the cost of electric
car ownership comes down further and the public is more convinced
of their value.
Baringa’s new report, Is the UK ready for electric
cars?, reveals that one in three (34%) people are
willing to pay a bit more for a 100% electric car compared to an
equivalent petrol or diesel model. However, people are only
willing to spend a little extra to get behind
the electric wheel. Less than one in five (18%) say they are
willing to pay up to 5% more, while just 13% say they are willing
to pay up to 10% more.
This willingness to spend more on an electric car is mainly due
to the environmental benefits they provide, cited by 68% of
survey respondents as a motivating factor. Perceptions around
total cost of ownership are also important, with half (49%)
saying they would pay more upfront because a 100% electric car
will be cheaper to run in the long term. In addition, more than a
fifth (22%) of people say they would be willing to pay more
because subsidies will allow them to recoup the extra cost.
However, even though people are willing to pay a little extra,
more than a third (35%) think 100% electric cars are worse value
for money than petrol or diesel cars. Baringa believes this may
be due to the expense of well-known brands such as Tesla, whose
available models in the UK retail from around £60,000 – much
higher than the £13,715 price tag for the UK’s current
best-selling conventional car, the Ford Fiesta.
These mixed opinions on value highlight a key issue for
policymakers when considering electric cars. Different driving
habits mean there can be a significant difference in the total
cost of electric cars and petrol or diesel cars. For example,
fleet buyers, who are purchasing vehicles to drive much higher
mileages than a private buyer, will save more on fuel with 100%
electric models. As such, electric cars are already on par with
more conventional options for some fleet buyers today. In
contrast, private buyers, whose vehicles are typically used much
less, aren’t likely to see parity until the mid 2020s when
electric car prices are expected to have fallen. Baringa is
urging the Government to take these diverse needs and economies
into consideration when deciding how best to support the electric
vehicle market.
Oliver Rix, Partner in Energy and Resources at Baringa Partners,
comments:
“Our research demonstrates that there is appetite to move away
from petrol and diesel cars given the environmental benefits on
offer, even if it means wallets becoming slightly lighter.
However, it also shows that financial considerations remain
important, and the additional money people are willing to spend
is unlikely to be enough to significantly increase uptake in the
short-term. Therefore, the Government needs to ensure grants for
electric cars continue to be offered until prices fall more in
line with their petrol and diesel counterparts.
“Car manufacturers also have a role to play. They should
highlight the wider financial benefits of owning an electric car,
such as the tax and fuel savings, and promote the cheaper models
available. But work is also needed to increase the range of
electric cars available. We know that many people think electric
cars are less stylish than their petrol or diesel peers, so
stylish, high performance models need to be produced as well as
more low-cost options.”
ENDS
Notes to Editors
The findings in this release are based on the results of an
online survey, conducted by Opinium. Our results have been
weighted to nationally representative criteria.
The survey was of 2004 UK adults, aged 18 plus. This took place
from the 27th to 29th March 2018.
