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Tesla has hit a bump in the road – but there’s no need to hit the brakes on electric cars

What does a plunge in demand for Elon Musk’s battery-powered marque mean for the rest of the industry, asks Sean O’Grady – that another game-changing tech innovation is just around the corner

Sunday 07 April 2024 14:01 BST
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Despite an unexpected gloomy quarterly financial report from Tesla, sales of electric vehicles are still rising
Despite an unexpected gloomy quarterly financial report from Tesla, sales of electric vehicles are still rising (Getty/Shutterstock)

I’m not quite sure what to make of the supposed wave of “bad news” for the electric car, except to say that it does feel very much like a case study in the shortsightedness of much of the press.

Tesla’s sales and latest quarterly financial results were disappointing – deliveries nosedived, and sales saw their first decrease since 2020 – and the fact it is the biggest and most celebrated all-electric car make in the world makes the story naturally compelling. Plus, of course, the magnetic personality of Elon Musk, a man who seems to have too many challenges at the moment, even for his formidable, if flawed, talents.

Less well-known, but equally important were the results from BYD, a private-sector Chinese concern. They too were down, by even more than Tesla, a product of weaker demand in the home market. As a result, Build Your Dreams, to give the brand its full title, is now “only” the second largest battery electric car company in the world.

The latest British car sales figures reveal that battery electric vehicle (BEV) sales have lost market share by about one percentage point, to 15.2 per cent, compared to March 2023. Registrations of BEVs rose 3.8 per cent in absolute terms, with only fleets showing any volume growth.

From some of the coverage, you would think the electric car was as dead as a flat battery. Yet another wave of headlines were asking, “Is this the end of the EV?”. This is, as my colleague John Rentoul would say, a classic QTWTAIN – a question to which the answer is no.

Such articles are usually filled to the brim with the usual half-truths and myths about the electric car as an inherently more costly and impractical alternative to petrol, diesel or hybrids. So, let’s get a few things straight.

First off, the electric car is not dead and isn’t about to be killed off. Unless the world abandons the fight against climate change (admittedly a worrying possibility), the drive to lower CO2 emissions in vehicles via a combination of mandatory targets, taxes and subsidies will continue.

Such targets should be “platform agnostic” and take into account the emission and pollution costs in manufacturing, using and recycling various technologies, including fossil fuels, hybrids, BEVs, hydrogen fuel cells and anything else that comes along. However, for now, the expert consensus seems to be that for most personal transport applications (ie not big lorries), the BEV is, on balance, best.

BEVs are not heroic, because, for example, the quest to mine the lithium and cobalt for their batteries can scar landscapes and lead to the inhumane treatment of child workers in the Democratic Republic of Congo. But nothing’s perfect outside of a return to cycling and public transport.

Second, and related to that, electric cars can be cheaper to run than their petrol equivalents, as well as being greener and quieter. It does, though, depend on the pattern of usage. The more you drive, the more you save, because home electricity tariffs are so much more economical than petrol or even diesel for a given mileage.

But there is still a premium, at least in theory, to buy a BEV over a petrol equivalent, though it’s not always obvious because of differences in specification and performance. If you take the excellent Vauxhall Astra electric that I’ve just been driving, the “list price” is closer to ?40,000 than the ?30,000 the comparable petrol model costs. That said the current market chaos caused by Rishi Sunak mucking around with take-up targets have created BEV oversupply and some temporary bargains – including getting the aforementioned new electric Astra for the price of a petrol one, and it’s a choice you won’t regret.

The thing to focus on is your needs, assessed honestly. The ideal electric car driver will be able to charge overnight at the lowest tariff (maybe even supplemented by their own solar panels), and travel average mileages (eg commuting) but rarely more than the 200 or so mile round trip most BEVs accommodate now.

By contrast, a BEV won’t suit you if you live in a flat or terraced house with no access to cheap charging at home, so you have to spend more on electricity from commercial charges, which also levy full VAT. If you only use your BEV to go to the shops occasionally you’ll also be losing out financially.

By the way, probably the worst choice many people make is to go for the hybrid (HEVs) or plug-in hybrid vehicles (PHEVs) as a kind of “compromise”, but are actually, in general, the worst of all worlds. They do suit a particular pattern of use, and enjoy unjustified tax breaks, but many PHEVs never get charged anyway. In the words of Jack Parsler, of charging point installer Crystal EV:Towing around an extra half tonne or more of redundant battery weight increases fuel consumption and emissions, has a much higher manufacturing impact than either a pure battery electric or pure ICE vehicle, and wholly undermines any perceived ‘green’ or ‘eco’ benefit.”

As for choice, it’s never been greater for pure-electric motoring, and with generally much better ranges than even a few years ago. Some of my favourites include the Honda e, Abarth 500 and Citroen Ami for town; the Astra, Kia Niro, Jeep Avenger for family transport, MG ZS for value, Hyundai Ioniq 6 for style, Maserati GranTurismo Folgore for thrills, and the BMW i7 and Mercedes-Benz S-class for luxury. All are refined and offer exemplary performance – and there are scores more.

Last, let’s go back to some of those “shock” stats last week, and add a little perspective.

A glance at the rearview mirror reveals that in the year 2000, Tesla and BYD hadn’t even been founded, and there were no BEVs to speak of on sale, maybe just the eccentric Reva G-Wiz. So their market share was basically nil, and even as recently as 2019 (the last normal item before the pandemic) it was a little less than 5 per cent. And now used examples of the all-electric Nissan Leaf and Renault Zoe from about 2017, both still capable, can be had for less than ?5,000. That’s still beyond the means of many families, but the trend in affordable electric driving is encouraging (and don’t forget the lush deals out there).

Over the next few years, we may well see a Great Leap Forward (courtesy of the Chinese, probably) in technology, and the mainstreaming of the solid state battery, which would be even greener and obviate the need to scour the earth for rare minerals.

So the electric car is not dead – and, if it ever were to be, you may be quite sure that the planet wouldn’t be far behind.

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