The arrival of electric cars onto the market has long been anticipated. With the production of electric cars ramping up considerably over the past few years, it appears as though this moment may be imminent. A more pertinent question is which UK high-growth companies are making this happen?
According to statistics released in March, there are currently 67,000 registered plug-in electric cars in the country. This figure doesn’t take into account the 4000 electric vans and 10,600 charging points. This has increased from last year, with the number of registered electric vehicles in London increasing by 22% in the first quarter of 2016, compared to the same quarter of the previous year.
The proliferation of electric vehicles throughout the UK is high up on the government’s agenda, with initiatives such as the Source London scheme looking to introduce thousands of charging points across the capital.
What’s the hold up?
Widespread public use of electric vehicles remains some way off, which some are putting down to some fundamental issues with the practicality of bringing this type of car onto the mainstream market. Reuters have reported that “the electric car industry has faced a chicken-and-egg paradox with the installation of charging stations. Property owners have been reluctant to install them before EVs (Electric Vehicles) hit the road en masse, and drivers are wary of buying EVs until charging stations are widely available.”
The other major roadblock preventing a nationwide implementation of electric vehicles is, simply, the cost of batteries. Although this is improving, expense is still a considerable factor. There are also practical difficulties with the cars themselves which mean they are not currently able to travel far enough on a single charge, in comparison to petrol-powered vehicles.
There are some political parties who oppose the use of the electric car altogether. The worry for many is that the rise of electric-powered cars will mean an oil crash as the value of petroleum decreases. Given this, it is perhaps unsurprising that OPEC (Organisation of the Petroleum Exporting Countries) has claimed electric vehicles will account for just 1% of all road vehicles by 2040.
But some organisations, such as Bloomberg, have other ideas. They, amongst others, believe that electric vehicles will account for around 35% of the overall market by 2040. They have even gone so far as to claim that “it’s looking like the 2020s will be the decade of the electric car”. Bloomberg predicts that the rise of the electric car is inevitable and likened it era defining products such as the early fridge, colour televisions and the first computers.
What’s next for the manufacturers?
Nissan, Chevy, and Elon Musk’s Tesla have all planned to begin selling long-range electric cars within the next year. By the end of 2016, major players in the industry, including Audi, BMW, Chevrolet, Chrysler, Hyundai and Mercedes are all expected to introduce new electric models – almost all of these being hybrid plug-ins.
Interestingly, the electric vehicles market is not just limited to car manufacturers. Google and Apple’s activities within the space have both been widely reported. Reuters reported last year that Apple was exploring electric vehicle technology in a bid to discover “new sources of revenue amid a maturing market for its iPhone”.
High-growth UK companies fuelling the space’s growth
There is plenty of activity in this market overseas. In January this year, Elon Musk described Hong Kong as a ‘beacon city for electric vehicles’. Meanwhile in the US, California-based ChargePoint, an electric vehicle network company, raised $50 million in a round led by Linse Capital. But what’s happening in the UK? Well, plenty.
Based in London’s Silicon Roundabout, POD Point aims to tackle the problem of short-life batteries by supplying electric vehicle charging solutions. The company has raised £4.1 million in equity finance, including crowdfunding campaigns via both Seedrs and Crowdcube. Earlier this month POD Point announced a new partnership with Nissan, meaning they became the car manufacturer’s approved provider of home charging equipment.
“There is a wave of momentum in the EV industry now as many manufacturers produce electric vehicles” says Erik Fairbairn, founder and chief executive of POD Point. “With more than 55,000 plug-in vehicles on the road in the UK already we are starting to see plug-in cars become the de facto way to drive.”
Another company developing and providing electric vehicle charging points in the capital is Luton-based Chargemaster. With £7.2 million equity investment to date, Chargemaster has also acquired smaller UK electric charging companies Elektromotive and GB Electrical. Chargemaster CEO David Martell has spoken out about the need for more destination charging points, describing London as having “a big hole in this kind of facility”.
MSF Technologies is yet another example. The Norfolk-based company operates in the manufacturing side of things, producing components for electric cars. With two unannounced equity fundraisings under its belt, the company has a current valuation of £4.6 million. MSF have partnered with Bradshaw Electric Vehicles to deliver a new electronic drive system.
What does the future hold?
While there are legitimate practical concerns surrounding the success of the electric vehicle industry, there is much cause for optimism. While it is true that these practical issues have slowed down the progress of the industry, there are companies surfacing all the time willing and determined to create solutions or these problems – POD Point being a great example of this.
It is also true that certain government organisations are intent on halting the electric vehicle revolution, and yet dynamic new companies in this space continue to surface. While there is much work to be done yet, it appears that the future is bright for the industry. Both in the UK and abroad, there is evidence of substantial investment, development and continued progress in this area. We may be likely to see more electric cars on our streets in the near future after all.