Fuel Type: Plug-in Hybrid (PHEV)

Will car sharing get a post-COVID second wind?

The sharing economy and car sharing are sociologically attractive concepts. We seek to live more sustainably, and digitally-enabled business models have increased accessibility to sharing solutions. On the other hand, car sharing (and ride hailing) have failed to reduce road congestion or the number of cars in operation. They share another joint challenge: they struggle to become profitable and have been crushed through the pandemic. Dr. Christof Engelskirchen, Autovista Group chief economist, shares his perspective.

The sharing economy is driven by a desire to connect with a community, to declutter, to increase flexibility and to live more sustainably. It is often facilitated by community-based online platforms. Car sharing is a logical extension of the sharing economy and has grown in popularity over the past 10 years.  We differentiate between three types:

  1. Free-floating car sharing, where cars park on public roads within a geo-fenced area. This service exists almost exclusively in larger cities. Smaller cities (<500,000 inhabitants) do not attract free-floating car-sharing services due to expected low utilisation rates. Pre-booking is not possible;
  2. Stationary car sharing, where drivers pick up cars and return them to dedicated locations. Pre-booking is usually required. Peer-to-peer car sharing (e.g. via Zipcar or Turo) falls under this category as well; and
  3. Ride hailing. This can be peer-to-peer based or professional-service ride-hailing (e.g. Uber or Lyft). The difference to the traditional taxi ride is that it is fully online-enabled and cheaper. Depending on the supplier and business model, pre-booking is possible. In peer-to-peer-based business models (e.g. Blablacar), pre-booking is usually required.

Rise, hype, disillusionment

Shared mobility saw a rise and was hyped years ago, but was confronted with challenges even before Covid-19 put another temporary obstacle in the way. These are the known challenges for free-floating and stationary car sharing:

  • Low utilisation rates – particularly problematic in free-floating car sharing as more cars are required than in a stationary setup to allow for flexible access. Drivers use free-floating car sharing for shorter trips, which brings utilisation down;
  • High costs for parking – particularly challenging in free-floating car sharing, as these cars park on public roads or in publicly-accessible parking garages;
  • High costs related to mistreatments, service and cleaning. Higher-frequency driver changes add to the challenge. Cars need to be regularly cleaned, often daily or on an ad hoc basis;
  • Additional costs for relocating cars. Cars need to be regularly re-distributed within the network as clusters form, e.g. at airports in the morning. This requires a human being to pick cars up from remote locations and put them back into those areas that would attract most drivers to the car. This is a daily logistical challenge for free-floating car sharing but affects stationary car sharing as well;
  • Cars depreciate more and faster in a shared-driver setup. Remarketing results are substantially lower and refurbishment costs are higher;
  • Competing micromobility solutions, such as e-scooters and shared bikes, represent another challenge to the profitability of car-sharing services. Renting a Smart in Frankfurt or an e-scooter costs approximately the same: around €0.20 per minute;
  • Car sharing is challenged in two more important use cases: safety regarding transport of (small) children and in terms of cost when running multi-stop trips; and
  • Bigger cities have no particular interest in offering preferential conditions for car sharing as they learn that this service does not help manage city car parking.

Rising numbers of cars in cities

There have been plenty of seemingly contradictory views on the effects of car sharing on new-car sales, congestion and substitution. The contradictions stem from non-representative samples, methodological flaws and a non-comprehensive analysis of the topic. For example, researchers forget to simulate the faster replacement cycles of cars in shared fleets or conduct surveys amongst car-sharing customers. Lobby groups are the driving force behind many studies. This does not help to demystify the topic. Autovista Group research found that the net effect on new-car sales of car sharing is positive, i.e. the shorter holding cycles overcompensate the loss of private new-car purchases.

We see this confirmed when looking at cities in Germany where free-floating and stationary car sharing is most prominently accessible. Figure 1 shows that the car-park size has increased between 8-12% between 2012 and 2020. There has been exponential growth in car-sharing units but they still only contribute 0.05% to the cars in operation in Germany.

Figure 1: Size of B2B car-sharing park vs. total passenger car park in selected German cities

CE article - B2B parc

Ride hailing increases congestion

Ride-hailing businesses are struggling with profitability. There are concerns about the sustainability of the business model as long as cars need a driver. A scientific study from 2019, which analyses the role of ride-hailing companies on traffic congestion in San Francisco, concluded that ride hailing increases congestion. There is some substitution between ride hailing and other road trips, but most road trips add new cars to the road. Ride-hailing vehicles stopping at the curb to pick up or drop off passengers have a notable disruptive effect on traffic flow, especially on major arterials. This was evident at the CES in Las Vegas in 2019: the city lacks a solid public-transport infrastructure and if you choose to take an Uber or Lyft, signs direct you to pick-up and drop-off areas at the major resorts. Downtown, no curb pick-ups and drop-offs are permitted.

Unmet promise

Car sharing has failed to deliver against the promise of contributing to lowering the traffic problems in big cities. It does not reduce the number of vehicles. It takes up parking space. It cannibalises public transport and cities will not give preferential treatment to these services unless they see a positive benefit. Stationary car sharing is less affected by these challenges but is also far less flexible for users. Many free-floating car-sharing services have been taken off the market because of profitability challenges, not only because of the lack of economies of scale.

Even Daimler and BMW, which combined their Car2Go and DriveNow services into ShareNow, have withdrawn from major cities and countries (e.g. Florence, London, Milan, Brussels and North America). Free-floating car sharing will likely continue to be part of multi-modal mobility solutions in the future, but there will be no or only very few additional cities added to the portfolio in the short term due to the challenges around profitability. Free-floating car sharing will not be a disruptive force to inner-city mobility. It will be a niche play, if it can be operated profitably.

The outlook

Stationary car sharing will continue to complement multi-modal mobility. With the current trend towards flexible work arrangements, suburban areas regain attractiveness. Stationary car-sharing services may add further value for those areas. Peer-to-peer offers have grown through the pandemic as people continue to avoid public transport. Retail locations, or car dealers, may find a niche to offer such services. Rental companies could also enter the market with shorter-term, more flexible arrangements.

Peer-to-peer ride hailing will continue to operate successfully in a niche. Professional-service ride hailing (e.g. Uber, Lyft) will continue to face profitability challenges. Ride hailing in its current form adds price pressure on the backs of drivers that are often self-employed.

In the medium term, professional-service ride hailing could benefit from autonomous driving Level 4, as this will replace the driver. Within the next five to 10 years, it may be suitable for very specific high-utilisation cases as the technology is very expensive. It will not be used in mixed-traffic situations any time soon, due to safety and liability concerns. An example could be autonomous ride hailing to bring people from a Park’n’Ride area to an out-of-city access point for existing public-transport infrastructure. Cities that rely on a highly-utilised public-transport infrastructure will not allow Waymo and other operators to take up and load off passengers at inner-city access and switchover points for public transport. The reason is that cities need to scale and increase utilisation of public transport and to manage car traffic.

TCO Dashboard: D-SUV BEVs uncompetitive because of incentive ineligibility

In the third of a new series that considers total cost of ownership (TCO), Autovista Group has created a dashboard comparing the retail prices (including taxes) and TCO of leading D-SUV battery-electric vehicles (BEVs) in France, Germany, Spain and the UK. Senior data journalist Neil King discusses the findings.

Autovista Group’s TCO analysis reveals that D-SUV BEVs will struggle to compete with petrol and plug-in hybrid D-SUV models in France, Spain and the UK as their list prices exceed the price ceiling to be eligible for government incentives. Even in Germany, the TCO of fully-electric D-SUV models is only on a par with petrol models because of the €7,500 incentive. However, the plug-in hybrid (PHEV) BMW X3 has a lower TCO than comparable fully-electric and petrol models, despite only being entitled to a €5,625 subsidy.

TCO Dashboard - D-SUV segment

Incentive ineligibility

The price positioning (including taxes) of the D-SUV BEVs under review, (Audi e-Tron, Jaguar I-Pace and Mercedes-Benz EQC) is around €70,000 in continental Europe (£65,000 in the UK), This exceeds the price caps of €60,000 in France, €45,000 in Spain and £50,000 in the UK.

Without the aid of subsidies, the D-SUV BEVs are at least €6,000 more expensive than our reference plug-in hybrid model, the BMW X3 PHEV, and €17,000 costlier than the 2.0-litre petrol BMW X3 in France. In Spain, the price premium over the X3 PHEV for the cheapest D-SUV BEV under review, the Mercedes-Benz EQC, is over €17,000 and the Mercedes BEV costs about €28,000 more than the petrol X3. Price differences are similar in the UK too when converting the British Pound to Euro at current exchange rates. In Germany, the subsidy helps to close the pricing gap but the BEVs still cost at least €6,000 and €11,000 more than the X3 PHEV and the petrol X3 respectively.

Full-size electric SUVs can therefore only compete on price against petrol and plug-in hybrid rivals if attractive list price positioning is combined with healthy government support. List prices and/or price ceilings for incentives therefore need to be lower, and the incentives higher for these models to gain momentum.

Discounts

Pricing data is provided in the local currency for the same five models in each market, including retail list prices (including taxes), incentives, discounts, and a final adjusted retail price. The TCO is calculated as the sum of total acquisition costs and total utilisation costs. Acquisition costs cover depreciation, financing and acquisition taxes. Total utilisation costs consist of servicing, fuel, wear, tyres, insurance, and utilisation taxes.

These standard TCO results do not factor in discounts that buyers may negotiate on petrol competitors such as the BMW X3. For this reason, TCO calculations are also provided with discounts of 10% and 20% applied to the 2.0-litre, 184-hp petrol BMW X3 in this analysis.

Emissions implications

The upshot is that there is not a compelling argument for consumers to switch to electric full-size SUVs across Europe. Even in Germany, consumers are likely to favour petrol power as the BEVs do not offer a sufficiently attractive TCO advantage. PHEVs may fare better but the cost savings come with the inconvenience of charging and if the battery is not recharged, which is common among PHEV owners, the savings would of course be eroded.

This is a concern as SUVs continue to gain in popularity and, in turn, are driving up vehicle emissions. Whereas B-segment and C-segment BEVs offer competitive TCO, albeit only because of incentives, there is an argument that this is more important for SUVs as governments and carmakers alike seek to reduce pollution levels. Higher incentives across Europe, along with lower prices and incentive ceilings, would also provide a much-needed boost as the automotive sector contends with the fallout from the coronavirus (COVID-19) pandemic.

Click here or on the screenshot above to view the pricing and TCO dashboard for the D-SUV segment models under review in France, Germany, Spain and the UK.

Click here for the TCO dashboard for C-segment models, and here for the TCO dashboard for B-segment models.

Targeting non-exhaust emissions

Each year across Europe, there are around 400,000 premature adult deaths that are attributable to air pollution. Road transport emissions account for a significant share of this burden. European emissions standards continue to pressure manufacturers to reduce vehicle exhaust emissions. With new light commercial vehicles (LCVs) emitting smaller amounts of toxic particulate matter (PM) than ever before, targets are shifting to ambient Non-Exhaust Emissions (NEE).

These non-exhaust sources contribute easily as much and often more than the tailpipe exhaust to the ambient air PM concentrations in cities, and their relative contribution to ambient PM is destined to increase in the future with increasing alternative fuelled vehicles, posing obvious policy challenges for the UK government.

While emissions control regulation has led to a substantial reduction in exhaust emissions from road traffic, currently NEE from road vehicles continue unabated. These include particles from brake wear, tyre wear, road surface abrasion and resuspension in the wake of passing traffic. Also adding to road traffic PM in the atmosphere is the corrosion of vehicle components as well as crash barriers and street furniture.

Quantifying the magnitude of such emissions is problematic both in the laboratory and the field with the latter depending heavily upon a knowledge of the physical and chemical properties of non-exhaust particles. However, studies show that rapid vehicle deceleration creates large amounts of PM caused by wear to the brake linings and discs.

Likewise, emissions of PM from tyre wear increases with vehicle speed, incorrect tyre pressure and low air temperatures as the tyre rubber is less elastic. Overtime during all driving cycles, tiny particles are shed as the tyre wears. The composition of the emitted PM from modern tyres is a complex blend of mostly synthetic materials and other chemical additives that add strength, colour and weatherproofing to the tyre. Modern tyres are not biodegradable and are a significant contributor to micro-plastic pollution. Incidentally, many of the chemicals used to manufacture tyres can cause environmental impacts on their own and pose risks to human health.

Some estimates suggest current exhaust emissions and NEE contribute almost equally to total traffic-related PM emissions. However, there is no legislation in place to regulate or lower NEE ambient levels at present.

Overlook of London City gloomy exhaust emissions

Mitigation strategies for NEE

The most effective mitigation strategies to reduce NEE are as follows:

  • Reduce traffic volume
  • Where traffic is free-flowing reduce speed limits (e.g. motorways)
  • Promote driving behaviour that reduces braking and higher-speed cornering
  • Reducing the material tracked onto public road surfaces by vehicle movements in and out of construction, waste-management and similar sites

The transition to LCV electric vehicles (EV) is still in its infancy, but with major fleets like British Gas (1,000 units) and Northgate (250 units) already investing in sustainable greener LCVs, the appetite is growing. Although heavier, these vehicles should decrease PM from the brake linings and discs through the use of regenerative braking. As these vehicles rely less on frictional braking they should have lower brake wear emissions.

However, tyre and road wear emissions increase with vehicle mass. This has implications for vehicles with heavier powertrains (e.g. additional battery mass) than the equivalent internal-combustion-engine (ICE) vehicles. The net balance between reductions in brake wear emissions and potential increases in tyre and road wear emissions for vehicles with regenerative braking remains unquantified and will depend upon road type and the driving mode, as both influence the balance between the different sources of emissions.

Low rolling resistance tyres are helping slow the wear and decay of tyres during the life of the vehicle, but end-of-life recycling is not a straight forward process due to toxic materials used in tyre manufacturing. Today, tyres cannot be sent to landfill due to the chemicals that they contain. Tyres must be granulated and are now used as the base material for a wealth of different products such as:

  • Roof tiles
  • Carpet underlays
  • Running tracks
  • Artificial football pitches (rubber crumb)
  • Drainage systems
  • Road resurfacing

In the manufacturing process for brake pads, the copper content can be reduced, alternative components can be replaced for more environmentally friendly alternatives and carcinogenic material such as asbestos can be removed in favour of banana peel waste. With these changes, results show a significant reduction in fine particle emissions, whilst stopping power improves 17% and the brakes are quieter. Nevertheless, these brake pads are not in widespread use.

However, until the adoption of new environmentally friendly components, reducing the levels of NEE will be difficult. The latest ruling to support the UK’s Government Road to Zero strategy has brought forward the end of the sale of new ICE cars and LCVs to 2030. This will put further pressure on manufacturers to ramp up the development of EVs. However, the maintenance of current production processes and parts for EVs will mean that we will continue to emit high levels of NEE.

On a side note, the UK Government Air Quality Expert Group (AQEG) reported last year that it recommends with immediate effect that NEE are recognised as a source of ambient concentrations of airborne PM even for EVs. This should start to influence the parts chosen to equip new EVs as manufacturers become pressured to reduce NEE from their vehicles.

Brake dust front left view

2020 an amazing year for the used LCV market

As 2020 ends, it has been a ghastly year for so many people in private and in business terms, possibly the worst year they have ever had. However, for businesses involved in the buying and selling of used light commercial vehicles (LCVs), 2020 has told a different story.

Back in January, the LCV Market started as predicted, taking a week to shake off Christmas excesses before picking up pace with strong prices paid for the nicest stock. Strong trading continued until mid-March when Lockdown-1 arrived, stopping the country in its tracks.

Everything stopped. Factory production lines ground to a halt, suppliers didn’t supply, no new vehicles were delivered to customers, no auctions were open for sales and for the trade to have a brew beforehand and no used LCVs were bought at dealerships.

As the country sat at home ordering PPE and emergency supplies, food, groceries and everything else on the web, delivery companies realised that ‘if they ordered it, they’d need more LCVs to deliver it’. Immediately, searches on classified LCV sales websites rose dramatically and traders’ phones started to ring. The demand for more LCVs leapt to cover the delivery of the huge increase in essential equipment and products. As the country was urged to stay at home, home shopping went through the roof, causing delivery companies to report a Christmas-like spike in demand.

The demand for additional vehicles swallowed the majority of existing dealer stock, forcing the Government to help the sector by rapidly legislating temporary relaxations of delivery restrictions and drivers’ hours.

Businesses with existing fleets who would usually be de-fleeting during the summer did not. Most had little choice, but to run vehicles for longer, as there was no new stock to replace them with. In turn, this meant there was a smaller pool of second-hand stock being returned to the used market.

May saw the restart of LCV auctions, albeit only in an online format. The trade adjusted quickly, accepting the online sale process of buying remotely with the help of a series of images. The reopening of the auction houses coincided with pent-up retail demand with the initial oversupply leading to a short-term spike in transactions. This was soon replaced by supply shortages that started to starve the market of new and used stock. With customers in desperate need of additional vehicles, prices started to rapidly increase as the nicest examples across all ages were sought out.

The government had also offered small business loans and grants to help operators through the pandemic. This money was often spent on a newer van and with fewer vans for sale, this added to the unparalleled demand in the used market, sending prices even higher.

Demand has hardly faltered since Lockdown-1 maintaining prices at record high levels. Now as Lockdown-2 progresses, there is still no real sign of weakness in the used market.

In March 2019 the average selling price was £5,730, only £340 higher than March 2020. However, by October, the average selling price had shot up to £8,116, an increase of £2,726 or 33.6% over the 7 months of the pandemic.

June recorded an average sale price of over £10,750 for Euro 6 compliant LCVs, whilst pre-Euro 6 stock made up over 55% of all sales, selling for an average price of nearly £5,200. Of those who purchased a vehicle, 25% had never purchased online before.

By August, the average Euro 6 sales price had risen to over £11,400, whilst the Euro 5 and older vehicles had risen to more than £5,750.

By October, pre-Euro 6 values looked to have peaked, however, average prices for Euro 6 vehicles rallied again to nearly £12,775 despite increases in both age and mileage. The sustained appetite for retail-ready stock shows no sign of abating, with newer used vehicle prices likely to track Brexit driven new price increases.

Used LCV average selling price and first-time conversion rate table 2020

Looking further ahead to the remainder of 2020 and into 2021, there will be several factors impacting the sector and the wider economy.

Continued UK economic recovery needs to take into account the currently unknown factors of a successful vaccination programme against COVID -19 and Brexit. The possibility of 10% tariffs looms large on new vehicle list prices and 4% on parts if no trade agreement is reached with the European Union before the end of the year.

The quarter four Society of Motor Manufacturers and Traders (SMMT) LCV registration forecast for 2020 surprisingly estimated an increase of 6.6% to 288,000 units. Lead in delays on new stock, a shortage of vehicles at dealer level and two months left of the year would seem to rule out achieving those predictions. Registrations in the UK as at the end of October, remain over 24% below the same point last year.

Used LCVs will likely be the dominant revenue opportunity for dealers and OEMs for the remainder of the year and certainly the first half of 2021.

The new vehicle market is unlikely to return to any form of normality for some time, with registrations for 2021 tracking similarly to 2020. OEMs will bring forward strategy changes in line with the announcement that new petrol and diesel vans will no longer be sold from 2030. Manufacturers will accelerate the move to electric to respond to the new legislation and consumer demands.

Looking further ahead, bigger impacts upon the sector will include the clean air agenda, remote working and mobility. All will influence consumer choice with LCV fleets being increasingly chosen for specific urban, regional or national roles.

Glass’s continues to monitor the LCV market closely and has an open dialogue with auction houses and manufacturers, leasing and rental companies, independent traders and dealers as well as the main industry bodies. This information, combined with the wealth of knowledge in our CV team ensures Glass’s continue to be the most relevant in the market place.

Making waves with EV infrastructure reform

A new clean-energy strategy aimed at upgrading buildings was recently published by the European Commission. As the automotive industry gears up for a new era of electromobility, the renovation wave has the potential to transform the legislation around electrically-chargeable vehicle (EV) infrastructure. Autovista Group Daily Brief journalist Tom Geggus spoke with ChargePoint to find out more.

Christelle Verstrae - ChargePoint

‘We were extremely pleased with the announcement of the renovation wave for a very simple reason, because it touches upon private buildings,’ said Christelle Verstraeten, ChargePoint’s EU Policy Lead. At an EU wide level, everything related to publicly-accessible charging infrastructure falls under the alternative-fuels infrastructure directive (AFID), which is undergoing evaluation with a revision proposal due next year, she explained. This makes sense given that the directive was first adopted in 2014, making it somewhat dated when considering the advance of EV technology and demand. 

‘But if you talk about every charger that needs to be put in a private parking space, either at home or even possibly a private workspace, this is not AFID, it is the energy performance of buildings directive (EPBD), which is part of this renovation wave,’ Verstraeten said. As private locations are central to EV recharging, calls for greater development of this directive were made: ‘we needed a higher ambition from the EU to deploy charging stations in that space.’

Currently, under article 8 of the EPBD, EU member states are required to ensure new buildings and those undergoing renovation have ‘ducting infrastructure’ installed. More specifically, this means; ‘conduits for electric cables, for every parking space to enable the installation, at a later stage, of recharging points for electric vehicles,’ when a specific set of criteria is met.

So, there was a sense of relief when the European Commission confirmed the EPBD would be swept up in the renovation wave. ‘It is a good thing and it will be very complementary with the alternative-fuels infrastructure directive, because it is going to be private and public at the same time.’ Ensuring EVs are supported by a fully-functioning charging network will require pushing for advances on both the private and public front.

For EU member states, these directives like the EPBD act as baseline targets, which they can build upon and even exceed. Verstraeten explained that in France, the obligation to upgrade infrastructure was extended to existing buildings. Meanwhile, with its relatively high rate of EVs and contrastingly low number of garages, Amsterdam adopted a more tailored approach to installation. EV owners can ask for a charging station to be installed in the street if they are unable to charge at work or at home.

ChargeUp Europe

However, it appears current directives have resulted in fragmented approaches to infrastructure across Europe. ChargeUp, a new EV-charging industry alliance formed this year, wrote a letter to the European Commission stressing the need for a harmonised approach to the emerging market.

‘To date, we have noted that the existing AFID directive has been poorly implemented in parts of the EU and that its legal basis has led to ineffective enforcement,’ ChargeUp’s letter reads. ‘This has resulted in varying and inadequate EV-charging coverage, diverging national market approaches, different technology specifications and local technical requirements.’

The alliance pointed to fragmentation in metering requirements, mechanical-shutter specifications and concessions for charging along main traffic routes. This market confusion then becomes a barrier to investment, while lowering the potential of pan-European connectivity.

Infographic AFID

Source: ChargeUp

ChargeUp also pointed out that while the EPBD is a step in the right direction for EV charging, it is likely to have very limited outcomes due to its current exemptions. As part of the renovation wave, the group recommended revising infrastructure ambitions within the directive. ‘Increased cabling and ducting requirements need to come with increased ambition for the installation of charging points for the whole building stock, which also provides parking spaces,’ ChargeUp explained.

The legislative puzzle

Verstraeten explained that upcoming reviews will have to bring together all the different legislative puzzle pieces, like the AFID and EPBD, to form a full picture of how infrastructure can operate in harmony across Europe. Directives can set clearly defined standards and expectations, allowing providers like ChargePoint to get a better understanding of the market and where it is heading.

‘For us, if we have a clear target, it is actually easier to understand how the market is going to evolve and provide more security and certainty,’ Verstraeten said. This confidence will also extend to the consumer, where a greater understanding of the incoming infrastructure will provide a level of certainty and confidence, increasing the likelihood of EV adoption.

But because these directives do only act as targets, it still falls to individual member states to come up with goals to reach and agendas to implement. Verstraeten points out that, even then, there are still questions that cannot simply be answered by creating requirements at the EU level.

‘It is not only about having the obligation to put a charger in your garage if you live in a multi-family building,’ she said. ‘It is also about who is going to pay for that connection, and how the decision-making happens between the different owners of the buildings.’ While more granular issues like these will continue to cause ripples, it is only with a strong legislative foundation that Europe can hope to build EV infrastructure worthy of the electromobility tidal wave.

To find out how the electricity industry thinks the renovation wave will change EV charging, read Tom Geggus’ interview with the electricity industry association, Eurelectric.

The Van’s Headlights: The Renault Kangoo ZE

The Van’s Headlights

The UK Government announced in November to bring forward the ban on sales of new petrol and diesel cars and light commercial vehicles to 2030. While 2030 is a full decade ahead of the initial date by which the government planned to ban sales of new combustion-engine vehicles, certain plug-in hybrid or full hybrid cars and vans “that can drive a significant distance when no carbon is coming out of the tailpipe” will be allowed to be sold until 2035. The Department for Transport adding that the specifics of this “will be defined through consultation.” The implications for the automotive industry of this date change are colossal.

Contrary to many countries around the world, Germany has not yet announced plans to phase out the internal combustion engine. In addition to the UK, countries like Norway, Belgium, India, the Netherlands, Canada, Sweden, Denmark, France, Spain and the US state of California all have set concrete dates in the next two decades, when partial or complete bans on internal combustion engine-power will take effect.

With an urgency not encountered before, and to maintain market share, manufacturers need to reconsider new product cycle plans and powertrain investment. The £2.8 billion the UK Government has pledged, needs to be invested wisely on battery factories, incentives and infrastructure for both cars and vans if electric vehicles are to thrive.

In this month’s edition of The Van’s Headlights, the team consider the merits of the first full production electric van, the Renault Kangoo ZE van (2011 – ).

Renault Kangoo ZE van badge

The Renault Kangoo ZE

Originally launched as a petrol and diesel van range and a small people mover in 1997, the Kangoo has been ever-present on UK roads since.

The Renault Kangoo ZE was the first full-production electric light commercial vehicle (LCV) when it went on sale in the second half of 2011 and is currently number one in the European sales charts. Offered as a van, Maxi van and a Maxi Crew van in the UK, other countries also introduced pickup and tipper versions.

Manufactured at the MCA plant in Maubeuge, northern France, alongside the internal combustion engine (ICE) Kangoo. The Kangoo has over the years has seen rebadging exercises producing the Nissan Kubistar and NV250 and Mercedes-Benz Citan. Neither Nissan nor Mercedes-Benz currently rebadges the Kangoo ZE.

The Kangoo ZE has the same external dimensions as the ICE model. Its lithium-Nickel-Manganese-Cobalt batteries are located between the axles and under the load floor, allowing a single Euro pallet to fit comfortably in the standard length van and two Euro pallets in the longer Maxi van. Maximum load volume remains the same as its ICE counterparts at 4.6cu.m, however, maximum payload reduces to 640kg due to the weight of the batteries. Power comes from a 44kW 59hp electric motor generating 226Nm of torque. The 22kWh battery pack delivered a combined cycle range of 110 miles/170km NEDC, dependent on driving style and weather conditions. Its top speed was capped electronically to 80mph/130km/h.

Voted as International Van of the Year for 2012, the Kangoo ZE was also elected Electric Vehicle of the Year in 2012 and 2013 by GreenFleet.

However, when the Kangoo ZE launched, the list price did not include the cost of the battery. In a radical change to the norm, the battery was leased separately for a monthly fee, which varied depending on the mileage covered. Renault believed this would ease customer concerns over battery life degradation and the expense of replacing a battery.

At the start of the Kangoo EV life, the battery lease strategy worked. However, as batteries proved to be more resilient in real-life use, the issues caused by the battery lease for leasing and contract hire companies outweighed the initial customer concerns. The battery lease is a particular issue for second-hand buyers where they are faced with the strange concept of effectively buying a vehicle without a fuel tank and then having to commit to a separate monthly battery lease.

In response, during the second half of 2015, Renault began offering ‘Kangoo ZE i’ models alongside the leased battery versions which came with an all-inclusive price for the complete vehicle. 2015 also saw the introduction of the ‘Business’ trim name on Kangoo, allowing the Kangoo range to fall in line with the Trafic and Master LCVs.

The leased battery Kangoo ZE was phased out from the UK range when the improved Kangoo ZE 33 model was launched in 2017. The ZE 33 range came with a new battery, motor and charger, along with the introduction of a heat pump heating system. The new 33kWh battery had an improved range of 170 miles/270km on the NEDC cycle. The new R60 motor produced the same peak power of 44kW 59hp as its predecessor but is based on the more efficient R90 motor found in Renault Zoe.  Tested under WLTP criteria, the Kangoo ZE 33 returned a range of 143 miles.

Earlier this year and again falling in line with the Trafic and Master, a higher specification ‘Business +’ trim line was introduced that included front and rear body-coloured front bumpers, metallic paint, gloss black electrically operated and folding wing mirrors.

The all-new Kangoo van range, including Kangoo ZE, has been revealed ahead of its expected UK launch during the first quarter of 2022. The expectation is that both Nissan and Mercedes-Benz will rebadge the Kangoo ZE at this time.


Something for everyone

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Renault Kangoo as “a long-established van range that has been the preferred choice for many operators. The Kangoo ZE has taken many out of their comfort zones, but has proven to be a worthy addition to fleets operating in an urban environment.”

Andy added, “Kangoo ZE operators benefit from a growing charging infrastructure in the UK and the strong support of Renault’s Pro + dealer network.”.

The Renault Kangoo range

  • Diesel engines and an all-electric variant
  • One body style
  • Two lengths
  • Panel van and Crew Van
  • Two trim levels – Business and Business +
  • Euro compliant diesel engine line up
  • 3yr/100,000-mile warranty
Renault Kangoo ZE van charging


Renault Kangoo Mazi ZE 33 Business van (2019 – )

Standard specification on the Kangoo ZE33 Business included height-adjustable steering wheel, DAB radio CD with USB and Bluetooth, ABS brakes with electronic brake-force distribution (EBD), Hill Start Assist, Grip Xtend, RAID (Renault Anti Intruder Device), pre-heating function, standard 32A Type 2 charging cable, ZE Voice, drivers airbag, 15” steel wheels, 12v cabin power socket, bulkhead, asymmetrical 180o rear doors and remote central locking.

Renault Kangoo Mazi ZE 33 Business van interior
Renault Kangoo Max ZE 33 business van table
2019 Renault Kangoo Mazi ZE 33 Business van pros and cons table

Glass’s recommendation

  • Renault Kangoo Maxi ZE 33 Business van
  • Registration Plate: 2019/19
  • Mileage: 12,000 miles
  • Glass’s Trade £10,500 Excl VAT
  • Glass’s Retail £11,950 Excl VAT

Podcast: Used cars and ICE bans as manufacturers get smart

The Autovista Group Daily Brief team discusses the latest used-car figures from around Europe and the implications of internal combustion engine bans, as manufacturers establish smart-city projects to develop sustainable infrastructures…

https://soundcloud.com/autovistagroup/used-cars-and-ice-bans-as-manufacturers-get-smart

You can listen and subscribe to receive podcasts direct to your mobile device, or browse through previous episodes, on Apple, Spotify, Google Podcasts and search for Autovista Group Podcast on Amazon Music.

Used Car Market Update November 2020

Used Car Auction Wholesale Market

The UK used car auction market cooled a little in October. The performance was still good, but the three key measures of First Time Conversion, Percentage of Original Cost New, and Sales Volume were all slightly lower than in September. Sales volume was once again higher than the same month last year, while the percentage of cost new also exceeded that achieved in October 2019, up 4% even though the average age of the cars sold was only 2 months lower (84.2 months in October 2020 versus 86.2 months in 2019). The first time conversion rate was down from September’s 85.0% to 80.1%, although that is still a respectable result given the ongoing challenges.

Used car market first time conversion rate graph November 2020
used car market original cost new graph November 2020
Used car market sales volume index graph November 2020

Glass’s Editorial team observed that buyers became more selective during September and this trend continued into October. In that respect the October market appeared to be back to “business as usual”, with desirable cars – good condition and specification – selling relatively quickly and achieving stronger values, with cars of lower grading and specification struggling to make credible values, or in some cases even attract bids.

With this in mind, vendors must present cars at the highest standard. This means documents, keys and, where appropriate, charging cables must be present at the sale. The latter is very important even with the current relatively low volume of plug-in cars, as the significant cost of replacement cables means their absence directly impacts values achieved at auction.

Today, with purely online sales, vendor “presence” is incredibly important to maintain buyer participation in auctions. It is easy for buyers to follow more than one auction simultaneously, regardless of location. Therefore, to maintain sale momentum, a vendor who makes quick decisions on bidding and provisional sales creates a more animated sale with more enthusiastic bidding. This is because buyers know immediately what they have bought and as a result what they still need to look for.

The Glass’s Editorial team continue to monitor auctions remotely. The majority of UK auctions are currently held online and the data shows that buyers have transitioned to this new way of working quickly.

Used Car Retail Market

October’s used car retail market reflected the auction market and continued to follow the trends seen in September. The number of used retail sales declined 6% compared with September and saw a 16.2% decline versus October 2019. However, the average sale price continued to rise, up 1.5% over the previous month and 7.5% versus October 2019. These increases in the average sale price are particularly notable given the average age of retail used cars sold in October was 48.6 months, compared with 47.5 months in September and 39.4 months in October last year.

Used car market retail observations graph November 2020
Used car market average sale price graph November 2020

Glass’s Live Retail pricing tool measures the length of time a car spends on the retail forecourt. The average 35.4 days for October saw cars selling 2.3 days faster than the September average of 37.7 days and 3.5 days faster than October 2019. The is the fastest average sale time of the past two years. Additionally, the average discount required to achieve the sales in October was 1.8%, also much lower than the 3.0% recorded for October 2019. This increases the picture of a relatively healthy used car retail market in October 2020.

Used car market average days to sell graph November 2020

Next Month

October proved to be a relatively good month for both the wholesale and retail used car markets. The Welsh lockdown for the latter half of the month did not appear to have a notable adverse effect on the national market figures – September’s trends continued into October and the overall results were good.

However, with England in lockdown for much of November, it is reasonable to expect a reduction in performance for the key metrics. The English Lockdown-2 is not as restrictive as the one earlier in the year, and many car sales outlets are prepared for it this time around with ‘Click and Collect’ available in many locations. Overall, the effect on November’s sales will not be as pronounced as the fall in sales during Lockdown-1. However, auction values and sales volumes will be impacted, with early reports from the markets supporting this theory.

The Van’s Headlights: Ford Transit Connect

The Van’s Headlights

The current strength of the used LCV wholesale market is undeniable. The number of vehicles sold is up 26.7% on this time last year, whilst used LCV values are also up 22.8% over the same period. At the auctions, 88.5% of vehicles, sold at the first time of asking.

Vehicle production is still not back to pre-pandemic levels. With the lack of supply, there is a diminishing level of stock at dealerships. This has led to fewer de-fleets, with many fleets choosing to extend leases. This is resulting in a surge in demand for used light commercial vehicles (LCVs), especially with the UK population shifting consumer shopping activity from the high street to online retail.

In this month’s edition of The Van’s Headlights, the team consider the merits of the Ford Transit Connect Limited 240 1.5EcoBlue 120PS s/s Euro 6 L2 van (2018 – ).

2018 Ford transit connect limited L2 front side view

The Ford Transit Connect

Developed by Ford of Europe, the Ford Transit Connect van range launched in 2002. Replacing the Ford Escort Van and Ford Courier van ranges which ceased production the same year, the Connect has been in constant production ever since.

Initially built on the C170 Ford Focus platform and assembled in Gölcük, near Kocaeli, Turkey by Otosan, an automotive manufacturing company owned equally by Ford and Koç Holdings AS.

Originally available as a 4,278mm short-wheelbase (SWB) and 4,555mm long-wheelbase (LWB) van, the Transit Connect was offered with the following drivetrains

  • 1.8-litre petrol
  • LPG/Bi-fuel conversion,
  • 1.8TDdi diesel with a 75PS output.

From 2005, a more refined and powerful 1.8TDCi common rail diesel engine with 90PS was added to the range. L and LX trim levels were available at launch in the UK and were supported by a 3-year/60,000 mile warranty. In the second half of 2006, a more powerful 110PS diesel variant was added to the range.

To enhance the appeal, the Transit Connect was given a mid-cycle facelift in 2009, with a higher level of specification. Externally, a new deeper set front bumper and grille were added, whilst a new dashboard was incorporated in the cabin. At the same time, the Connect launched in North America immediately winning the ‘North American Truck of the Year 2010’. A Sport van was introduced in the UK in 2011, along with the short-lived Connect Electric van converted by Azure Dynamics.

The second generation of the Ford Transit Connect launched in 2013. Again built in Turkey, it was available with a Euro 6 compliant EcoBoost 1.0-litre petrol engine or Euro 5 compliant 1.6-litre diesel engine, with outputs of 75PS, 95PS or 115PS. To appeal to a greater audience, the Connect was made available in four different trim levels, Base, Trend, Limited and Sport. Two lengths were again available, with a ‘Double Cab-In-Van’ also part of the range.

A fully Euro 6 compliant 1.5TDCi diesel engine was introduced during the first quarter of 2016. As part of this launch, Ford added a new 8-speed PowerShift automatic transmission to the range with outputs of 100PS and 120PS.

A mid-cycle facelift was introduced in 2018, incorporating the latest Ford design DNA. A three-bar grille, slimmer headlamps, a more aerodynamic lower fascia and front spoiler gave a fresh new look. Additionally, an all-new 1.5-litre EcoBlue diesel engine was introduced with outputs of 75PS, 100PS and 120PS. A comprehensive range of driver assistance features including an Intelligent Speed Limiter with automatic vehicle speed adjustment to remain within maximum legal limits, Pre-Collision Assist with Pedestrian Detection emergency braking system, Side Wind Stabilisation, Active Park Assist and Ford’s Sync 3 voice and navigation system were also introduced.

In late 2019 a Euro 6d-Temp range launched, followed in October this year with the launch of fully compliant WLTP Transit Connect models. The range was enhanced further at this time with the launch of the all-new Active and MS-RT trim levels.

Something for everyone

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Ford Transit Connect as “the ‘go-to’ van for thousands of operators in the UK. This extremely capable light van is offered in two lengths as a panel van and a Double Cab-In-Van. Multiple trim specifications and engine outputs make it an ideal proposition for both fleets and sole traders alike.”

Andy added, “The Connect operates in a congested market sector, but benefits from a loyal following in both the new and used market, with buyers attracted to its strong brand and competitive pricing. Buyers of a Transit Connect also benefit from Ford’s strong Transit dealer network”.

Ford Transit Connect Limited 240 1.5EcoBlue 120PS s/s Euro 6 L2 van (2018 – )

The Ford Transit Connect range

  • Petrol and diesel engines
  • One body style
  • Two lengths
  • Panel van and Double Cab-In-Van
  • 6-speed manual transmission and 8-speed automatic gearbox
  • Four trim levels – Leader, Trend, Limited and Sport
  • Euro 6 engine line up

A high level of standard specification featured in the Transit Connect and included a reach and rake steering wheel, DAB radio with USB and Bluetooth, ABS brakes with electronic brake-force distribution (EBD), Hill Start Assist, drivers airbag, 16” steel wheels, slimline full steel bulkhead (van only), immobiliser, remote central/double locking, auto start/stop and EcoSelect function.

2018 Ford transit connect limited interior

Additionally, the recommended 2018 Transit Connect Limited 240 L2 model added a plethora of additional equipment as standard. This included; front fog lights, 16” alloy wheels, body-coloured front and rear bumpers, side mouldings, wing mirrors and handles, drivers 8-way adjustable seat, heated drivers and passenger seat, electric, heated and folding wing mirrors, DAB radio with USB, Bluetooth and 4.2” TFT screen,  Quickclear heated windscreen, electric front windows, manual air conditioning, leather steering wheel, rear parking sensors, cruise control, auto wipers and headlamps, adjustable speed limiter, keyless start, second remote key and perimeter alarm.

2018 Ford transit connect limited L2 van
Ford transit connect dimensions table
2018 Ford Transit connect pros and cons table

Glass’s recommendation

Ford Transit Connect Limited 240 1.5EcoBlue 120PS s/s Euro 6 L2 van

Registration Plate: 2018/18

Mileage: 31,000 miles

Glass’s Trade £12,600 Excl VAT

Glass’s Retail £13,750 Excl VAT

EU new-car registrations declined 7.8% in October

Autovista Group senior data journalist Neil King explores the latest figures released by the European Automobile Manufacturers’ Association (ACEA) as second-wave lockdowns bring more downturns.

New-car registrations in the EU declined 7.8% year-on-year in October.  Volumes fell from 1,034,669 units to 953,615. This marks a return to the market contractions suffered every month in 2020, except for the modest growth in September. The decline is an improvement on the dramatic double-digit declines suffered in March to June, and again in August, but does not bode well as the region contends with a second wave of coronavirus (COVID-19) cases and lockdowns.

EU new-car registrations, year-on-year % change, January to October 2020 and year-to-date (YTD)

EU new car regs

Source: ACEA

All EU new-car markets contracted last month – apart from Ireland and Romania, which enjoyed year-on-year growth of 5.4% and 17.6% respectively. This renewed EU-wide downturn was to be expected given the year-on-year declines already reported in France, Italy, Spain, and even Germany in October.

Single-digit declines were reported in France, Germany and Italy, although the decline in Italy was just 0.2% and the result would have been positive (up by about 4%) had there not been one less working day. This follows the 9.5% growth in new-car registrations in September, due to the new government incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). While the market still contracted in that month, demand improved but delivery times delayed many registrations until September and October.

On a less positive note, there was a double-digit decline of new-car registrations in Spain in October. The MOVES II and RENOVE schemes were introduced in July, and the new-car market saw a 1.1% increase in the month. Since then, however, there have been respective monthly declines of 10.1% and 13.5% in August and September, and now 21.0% in October. It is therefore clear that weak underlying consumer demand is the problem in the country. Measures to deal with the second wave of COVID-19 infections, and the calculation of the registration tax based on WLTP emissions figures from January 2021, are further complicating the recovery.

New-car registrations, year-on-year % change, October 2020 and year-to-date (YTD) 2020

New-car registrations, year-on-year % change, October 2020 and year-to-date graph

Source: ACEA

In the smaller EU member states, year-on-year contractions of more than 20% were reported in seven markets, including Finland, Slovakia and Slovenia. However, some markets were far more resilient, with downturns of less than 5% reported in Austria and Hungary.

Lockdown negativity replaces pent-up positivity

In the first 10 months of 2020, registrations of new cars in the EU fell by 26.8%. Even the market downturn in October continued the improvement in the year-to-date contractions, which bottomed out at 41.5% in the first five months of the year. The greatest loss among the major EU markets was in Spain, which has contracted by 36.8% in the year-to-date, ahead of only Croatia (down 43.5%) and Portugal (down 37.1%).

As the positive contribution of pent-up demand is ultimately exhausted, the second wave of COVID-19 infections, the severity, duration and geographic spread of lockdowns, and the economic fallout of COVID-19, will define how new-car markets perform in the remainder of 2020 and beyond. The key to recovery revolves around countries agreeing budgets for 2021, and improving economic certainty and consumer confidence to boost spending. The allocation of aid resources provided by the European Recovery Fund, agreed on 21 July, will also play a pivotal role in shaping the forward outlook for Europe’s new-car markets.

Manufacturer performance

Among the leading European carmakers, the BWW Group, Ford, Mazda, Mitsubishi and Nissan all registered more than 10% fewer new cars in the EU in October 2020 than in October 2019. Mazda suffered the greatest loss, with EU registrations down 38.0% year-on-year.

Fiat Chrysler Automobiles (FCA) and the Renault Group, however, managed to register 3.9% and 0.2% more cars respectively in the EU than in October 2019. All other major manufacturers suffered single-digit declines of between 6.2% (Honda) and 9.7% (Jaguar Land Rover) in the month.

Across Europe, manufacturers with a strong electric-vehicle portfolio are expected to perform better than those without as electrically-chargeable vehicle (EV) consumers are less likely to be tempted by used cars instead of new. This is because they tend to be less price-sensitive buyers, but there is also limited availability of the latest electric models on the used-car market. In the year-to-date, Toyota is the best-performing manufacturer in the EU, albeit with registrations down 16.9%, supporting this hypothesis.

In a new video, Autovista Group Daily Brief editor Phil Curry talks through the latest registration figures in the big four EU markets and the UK.

Will the automotive industry surf the renovation wave?

The European Commission published a new clean-energy strategy in October, aimed specifically at upgrading buildings. But the automotive industry has its part to play in the strategy. Will it surf this renovation wave, or will it be left adrift? To find out, Autovista Group Daily Brief journalist Tom Geggus, spoke with electricity industry association, Eurelectric.

Henning Hader
Henning Hader – Eurelectric

‘The renovation wave is a very necessary and a very timely initiative from the European Commission to tackle what is basically one of the largest remaining challenges in decarbonising the European economy, and that is buildings,’ explained Henning Hader, policy director at Eurelectric.

However, the wave is not focused solely on how efficiently a building uses energy, during heating or cooling for example. This process is just as much about future-proofing buildings for developments in smart technology, integration into digital infrastructure, and most importantly for the automotive industry, connection to advanced charging points.

Automotive application

‘The automotive sector is impacted across the entire value chain with this transformation,’ Hader emphasised. ‘They are being put under pressure, and rightly so, to come with products that are decarbonised, that enable people to switch to clean-energy carriers, using cars.’ This includes zero- and low-emission vehicles with electrified powertrains, i.e. battery-electric vehicles (BEVs) and plug-in hybrids (PHEVs).

In order to fully commit to decarbonisation, there must be enough demand for electrically-rechargeable vehicles (EVs). In the wake of coronavirus (COVID-19), governments are pushing incentive schemes to help the automotive industry make a green recovery, but these vehicles require charging and cannot exist in an infrastructure vacuum.

‘We know that cars are parked for 90 to 95% of their life, and 90% of that time they are parked at home or at work, in buildings, around buildings, under buildings, on top of buildings,’ said Hader. ‘So, what is important, is that chargers on private property, do not just appear out of nowhere. They have to be purchased and installed by the people who operate these buildings.’

This is where the renovation wave sweeps in, helping develop regulations, shaping what an updated structure should look like. Therefore, owners and operators of buildings need to be familiar with the opportunities this presents and even, ideally, be incentivised to anticipate this, allowing them to equip essential infrastructure.

The issue of availability

‘One of the biggest issues is the availability of charging points. We have lots of promising announcements about how the number of charging points is increasing, but most of those are public charging points,’ Hader stressed. The opportunity to install EV infrastructure has to be taken during a building’s renovation, even if the actual recharging system is not installed straight away. If the policy exists, all private and public properties would all be equipped for an upgrade, removing the potential for expensive retroactive installations.

‘These chargers enable us and our system operators, specifically distribution system operators, to take on all these cars that are charging in different areas, and when they are on smart chargers, they can become a flexibility source of the future,’ Hader explained.

This will be vital as cars adapt charging schedules, and even, under the right circumstances, feed into the grid. ‘There is an entire world of flexibility and efficiency that opens up if we make sure that renovating a building is about more than just insulation,’ he said. ‘It really is about getting the buildings to become a building block in the future energy system, where the buildings, the cars on those buildings and the people in these buildings, become very important flexibility providers.’ But, in order for this to happen, some current policies will require renovation.

Renewable energy directive

At its core, the EU’s renewable energy directive (RED) acts as a foundational policy for the production and promotion of energy from renewable sources. ‘There are elements in the renewable energy directive that are very relevant for electrification, and for electricity being used in transport, for example,’ Hader said. But, as part of the European Green Deal, this legislation, alongside the energy efficiency directive, is under review. Renewable-energy targets will be assessed, as well as other parts of the directive to fall in line with the Climate Target Plan for 2030. The results of the review and any accompanying proposals are expected in June 2021.

‘In order for the power sector to supply enough clean electricity to electrify the sectors that should be electrified, so, economically speaking, large parts of personalised passenger transport, heating to a large extent, some industrial processes, we will need to have a lot more capacity, specifically, of course, renewable capacity, because we want to fully decarbonise our sector’ he explained.

Therefore, RED will need to accelerate capacity rollout, particularly as it plays a fundamental role in helping build investor confidence in renewables. ‘In order to meet the new ambitious targets for 2030, and to decarbonise the power sector and to electrify large parts of society at the same time, we need more, we simply need more’ Hader said. Eurelectric’s Power Barometer reflects the developments the power sector is undergoing, as well as the challenges which lie ahead.

https://infogram.com/power-barometer-2020-1hmr6gq78p1o2nl

Source: Eurelectric

Knowledge is key

So, what barriers stand in the way of an automotive renovation wave? A chief issue to overcome is making sure both building owners and industry experts are aware of the new technological possibilities. This means supplying information across the renovation chain.

Proprietors need to be aware of the infrastructure potential, the experts offering advice to them must understand what technological and funding opportunities exist, and those carrying out the renovation work must have the practical skills to set up the technology. In this way, all necessary regulations can be adhered to, incentives taken advantage of, and infrastructure either installed or the framework set up for it.

This approach could help combat the rollout of soon-to-be-obsolete charging systems, only installed to meet immediate demand, but without any foresight of future smart-charging systems that are capable of cross-grid communication. But why is this type of connection important when it comes to EV infrastructure?

‘Let’s say you’re in a suburb of Brussels, and there is a system constraint because a lot of demand is coming online at the same time, and there is a need for flexibility so the operator can interact and communicate with these chargers,’ Hader explained. This could allow the grid operator to switch the role of the chargers and instead feed into the grid for a few minutes, with the consent of the EV owner.

But, the future of these systems depends upon the renovations that are carried out now. Even if they only consist of some basic piping, which could one day support smart, flexible and advanced EV charging technology.

LCV Marketplace Update November 2020

New Light Commercial Vehicle (LCV) Market

The light commercial vehicle (LCV) market grew for the second consecutive month in October, with the 28,753 registrations the highest performing on record for October. The 13.3% increase in registrations was driven by the heavier end of the van market ahead of an expected busy delivery period in the run up to Christmas. This is in contrast to a weaker October 2019, when the market was impacted by supply challenges linked to the introduction of WLTP compliant LCVs.

The second countrywide lockdown, social distancing measures, redundancies, Brexit and possible vehicle tariffs will all affect LCV demand for the remainder of this year and well into next year.

New LCV registrations graph November 2020

Year-to-date registrations to the of October have declined by 24.1%, with 236,833 units hitting UK roads (311,989 units – 2019). Breaking the month down by sectors reveals that registrations for pickups declined by a disappointing 31.8%, whilst vans under 2.0 tonnes, vans between 2.0-2.5 tonnes and vans between 2.5-3.5 tonnes increased by 1.6%, 2.9% and 26.8% respectively.

LCV top 5 registrations table November 2020

The quarter four SMMT LCV registration forecast for 2020 has just been issued and surprisingly shows an increase of 6.6% to 288,000 units. With a current shortfall of over 50,000 units, lead in delays on new stock, a shortage of vehicles at dealer level and two months left of the year, the new predictions would seem a tall order to achieve.

Moving into November, UK registrations remain over 24% down on the same point last year. The pandemic with the second English lockdown continues to seriously affect many businesses. Although September and October registrations were welcome boosts to the economy, it will take an exceptional boost to achieve the latest SMMT forecast.

The interconnected nature of the UK economy means that the demands of the latest lockdown and Brexit will bring opportunities and challenges in equal measure during the coming months.

October Used Light Commercial Vehicle (LCV) Overview

Performance in the LCV auction market remained exceptional in October with buyers exchanging high bids for retail-ready stock. The continuing stock shortages across all ages and sectors, driven by fleet extensions and increased rental demand, means vendors are currently in a very strong position. In the retail market, dealers are enjoying healthy profits as prices continue to rise. There is no change on the horizon, as prices look set to remain high for some time.

Euro 6 stock made up nearly 40% of all LCVs sold at auction during October, with an 88.9% first-time conversion rate. Much of this stock continues to support the increasing demand for home deliveries during the second lockdown and the run-up to Christmas.

The sustained appetite for retail-ready stock shows no sign of abating. Auction houses have adapted quickly during the pandemic, moving their business models online. Whilst dealers and traders, who historically attended physical sales to ‘touch the metal’, now buy online with confidence. In return, many dealers are offering retail customers ‘click and collect’ online services adhering to current government guidelines.

October in detail

Glass’s auction data results show the overall number of LCV sales in October fell by 8.4% versus September 2020 and were down 2.0% versus October 2019. First-time conversions were up 2.5% on September to 89.9% – the second-highest level in the last twelve months – and up 4.3% versus October 2019.

Since March this year, average sales prices have risen 33.6%, with October 4.5% up on September and 36.3% up on the same point last year. October prices were at the highest level for the last twelve months. The average age of sold stock rose from 69.7 months in September to 72.4 months in October, whilst this figure was 0.7 months lower than the same point last year.

In line with this older vehicle age profile, average mileages for those vehicles sold increased from 70,457 miles in September to 73,438 miles in October. Remarkably, the October average mileage is nearly 7,250 miles lower than at the same point last year.

Glass’s continues to monitor the LCV market closely and has an open dialogue with auction houses and manufacturers, leasing and rental companies, independent traders and dealers as well as the main industry bodies. This information, combined with the wealth of knowledge in our CV team ensures Glass’s valuations remain relevant in the market place.

New Car Market Update October 2020

Following September, new car registrations in October had a relatively low bar to clear to eclipse last year’s total, due to the WLTP emissions testing challenges faced in 2019.  However, once again registrations failed to match last year’s figure coming in 1.6% lower at 140,945, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT). This was the lowest October total for nine years and over 10% lower than the average October total over the last decade.

There was potential for an uptick in October, but with the Welsh lockdown towards the end of the month hitting registrations in the region by up to 25%, any momentum fizzled out. On a positive note, October was the least-worse month-on-month comparison versus 2019 (see chart below). The year to date registration total is now down 31%.

Total new car registrations monthly graph November 2020

Data courtesy of SMMT

Pure petrol cars saw a 21.3% reduction while diesel fell a significant 38.4% and accounted for just 14.9% of the new car market in October. However, large increases in mild-hybrid (MHEV) models mitigate these figures as they jumped significantly compared to last October, with petrol MHEV up 545.8% and Diesel MHEV up 56.6%. This shift has played out all year as shown in the year-to-date chart below, as car manufacturers continue to reduce CO2 outputs using mild-hybrid technologies.

New car market fuel type ytd % change graph November 2020

Data courtesy of SMMT

Despite the year’s very low total registration figure, the bright spot continues to be alternative fuel vehicles, especially Battery Electric Vehicles (BEVs). With the registration total of BEVs almost trebling in October compared to last year. The adoption of BEVs is higher in the fleet market, with 43,146 cars registered year-to-date compared to the private market at 26,682. Benefit in kind (BIK) taxation benefits and product confidence make the BEV proposition more compelling to company car users. For private retail customers, the lack of taxation savings, higher list prices (versus internal combustion engine vehicles), lack of knowledge of both longer driving ranges and the potential for the total cost of ownership savings, makes the BEV purchase proposition more difficult for private consumers with the increased upfront financial burden.

Explaining October’s registration figures

In October, none of the big five European markets achieved a positive increase in registrations. With markets entering various states of lockdown to ease a second wave of coronavirus (COVID-19) infections in November, the picture for the rest of 2020 could become murkier still. Autovista Group Daily Brief editor Phil Curry guides you through the figures in the latest registrations round up.

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel. There you will find videos on a range of subjects including autonomous vehicles, new-car registrations, safety systems, and electrification.

Ford and Volvo to pool emissions as recalls wreak havoc

Ford will enter a pool with Volvo Cars to meet its 2020 European CO2 emissions target. The recall of the Kuga plug-in hybrid (PHEV) reduced the number of low-emissions models the carmaker could sell this year, impacting its fleet-average CO2 level.

But while Volvo Cars announced it was set to overachieve on this year’s targets, its subsidiary Polestar confirmed it is also initiating a recall. As safety concerns continue to plague electric vehicles (EVs) and shake consumer confidence, manufacturers will need to act decisively if they want to meet their respective emissions targets.

Ford’s recall

In August, Ford recalled and suspended sales of Kuga PHEVs built up until 26 June, after four vehicles reportedly caught fire. The problem was traced back to the potential for water to cause an electrical short, which could then lead to overheated battery cells. It was estimated that over 20,000 models could be affected. With the Mustang Mach-E not yet in showrooms, Ford lacks a mass-market EV, leaving it heavily reliant on PHEVs to meet its emissions obligations.

‘Ford always has, and will continue to meet, the EU’s emissions targets. Based on our product roadmap and production schedule for this year, we expected to comply with the new regulations, and this was still our intent with the COVID-related disruption to manufacturing,’ the carmaker said in a statement sent to Autovista Group. ‘However, given the current supplier battery issue with the Kuga PHEV, Ford now will enter a pool to meet the EU’s 2020 emissions regulations without penalty for passenger vehicles, just as many other OEMs have done in Europe.’

‘We recently declared our intent to join an open pool with other OEMs and can confirm we are doing so with Volvo Car Corporation,’ Ford added. ‘Conversely, as we anticipate over achieving our CO2 targets on light commercial vehicles, we have filed separately our intent to form an open pool so other OEMs can benefit from the positive CO2 performance of our light commercial fleet.’

Pooling with Volo

At the end of October, Volvo Cars and its EV affiliate Polestar confirmed they would be able to reduce fleet emissions beyond their joint CO2 target. This left them with enough surplus to enter a pool with Ford, with the resulting revenue from the deal to be reinvested in new green-technology projects.

‘For Volvo Car Group, the future is electric and we are transforming our company through concrete action,’ said Håkan Samuelsson, chief executive of Volvo Car Group. ‘I am pleased to see that we are exceeding our CO2 reduction targets. It proves our strategy is the right one for our business and for the planet.’

PHEVs made up more than a quarter of Volvo Cars’ sales in Europe during the first three quarters of 2020. By 2025, the carmaker aims for its global sales volume to consist of 50% BEVs, with the rest made up from hybrids. Meanwhile, Volvo’s EV brand began deliveries of the Polestar 2 in July. But as Ford joins Volvo’s emissions pool, the Polestar 2 has climbed into the same boat as the Kuga PHEV, as it too hits stormy waters.

Polestar recalls

In a statement issued at the end of October, the BEV-maker confirmed it is initiating a recall as well as a service campaign of the Polestar 2. The recall will involve the replacement of faulty inverters on most delivered customer vehicles. This unit transforms stored energy in the battery into the power required by the electric motors. Polestar confirmed the total number of affected vehicles delivered to customers is 4,586.

Meanwhile, the service campaign relates to the high-voltage coolant heater, which is responsible for both cabin and high-voltage battery heating. The carmaker confirmed that faulty parts fitted to early production cars need to be replaced. The total number of affected vehicles delivered to customers is 3,150.

So, in the wake of the Kuga PHEV recall, Ford found emissions regulations relief in Volvo Cars, whose affiliate is now coming face to face with EV issues itself. As recalls ravage new EV models, carmakers must act quickly to ensure consumer confidence does not take too much of a nosedive. If public opinion takes a dramatic turn against PHEVs and BEVs, the potential for manufacturers to achieve their emissions targets will plunge.

Mini model range to expand and electrify

BMW has outlined new plans for its Mini brand, including the electrification of the entire model range, in cooperation with Chinese manufacturer Great Wall, and the addition of two new crossover models.

Mini started on the road to electrification in 2008, with the low-volume production of the Mini E. With the plug-in hybrid (PHEV) variant of the Mini Countryman alone, electric vehicles (EVs) accounted for 5% of the brand’s total sales in 2019, according to a BMW Group release. Following the launch of the Mini Electric earlier this year, the EV share has doubled to 10% of all new registrations for the brand.

Looking forward, Mini ‘will enable customers all over the world to have emission-free driving with a completely electrified model family.’ However, the brand will continue to offer internal combustion engines (ICEs) as they remain an ‘ideal solution for target groups and regions whose mobility needs are not yet met by all-electric vehicles.’

‘With the two pillars of our drivetrain strategy, we are pursuing the Power of Choice approach to meet the needs of our customers around the world,’ Bernd Körber, head of Mini, said in the statement. ‘This will create the conditions for further growth and actively shape the transformation of mobility.’

Speaking to the German publication WirtschaftsWoche, Körber commented that ‘we will electrify the whole Mini portfolio by 2024.’ He added that there will be Mini cars with ICE until 2030 but the brand will be ‘completely electric earlier than most other brands.’ Körber predicts that beyond 2025, more than half of all Minis sold will be purely electric, and Mini could be an electric brand in 2030. ‘Already at the end of 2020, the share of pure-electric and plug-in hybrid Minis sold will be about 10% to 15%. In 2021, it should then be about 15-20%.’

Crossing over

The future Mini range of all-electric vehicles will include the three-door hatchback, a new crossover model in the small-car segment and a compact crossover model. The Mini Countryman compact crossover will therefore be joined by a new crossover model in the small-car segment, which will be supplied exclusively with an all-electric drive. The next-generation Countryman will be available with both ICE and electrified powertrains.

However, this does leave a question mark over the future of the Mini Clubman compact hatchback model, which is produced at Mini’s plant in Oxford, UK. The Clubman spearheaded Mini’s move into the premium compact segment before being joined by the Countryman. Around 40% of the brand’s vehicle sales are in this segment.

Building with Great Wall of China

The Chinese vehicle market continues to grow and will become even more important for Mini in the future. Currently, around 10% of all new vehicles produced for the brand are delivered to customers in China. It comes as little surprise, therefore, that Mini will move from being an import brand to producing cars locally.

Based on a new vehicle architecture, developed from the ground up for pure e-mobility, battery-electric vehicles will be produced in China from 2023, in cooperation with local manufacturer; Great Wall Motor.

‘This venture will enable Mini to meet the rising demand for emission-free driving both in China and in the other global markets. Cooperation with the Chinese partner will be based on a clearly defined principle: production follows the market. With locally manufactured vehicles, Mini will serve the growing Chinese automotive market whilst maintaining stable production at other locations,’ BMW Group said in its statement.

Video: Emissions anxiety for carmakers

Autovista Group Daily Brief editor Phil Curry explains why some carmakers are concerned about rising CO2 levels, and how the industry has got to this point with a strict European target in place…

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How is electromobility changing fleets?

The automotive industry has been dominated by a few specific topics in the last year; from coronavirus (COVID-19) to electromobility and the advance of new technologies. But how have these subjects impacted one of the industry’s most important sectors? In a new series, Autovista Group’s Daily Brief journalist, Tom Geggus, speaks with industry insiders to discover how these themes are changing fleets. In this second instalment: electromobility.

While COVID-19’s impact on the automotive industry has been sharp and sudden, the effect of environmental concerns can be considered tectonic. But now the two phenomena are driving change in tandem, with COVID-19 acting as a catalyst for a shift to greener mobility. Pandemic recovery plans and environmental regulations are leading automotive companies and consumers down the road of electrification. Leaders of the European Automobile Manufacturers’ Association (ACEA) recently called for pandemic recovery funds to be channelled into a green comeback.

Analysis conducted by Transport and Environment (T&E) revealed that electric cars will treble their market share in Europe in 2020, with most carmakers on track to meet their EU emissions targets. The environmental lobbying group also pointed to company cars as the ‘low-hanging fruit’ of electrification. T&E claim the segment could be utilised to achieve national climate goals, given that six out of 10 cars sold in Europe are company cars, and that last year 96% of new registrations belonging to the sector were petrol or diesel. So how are fleets adapting to electrification in the wake of COVID-19?

PHEVs meet policy

Management consulting company let it fleet sees the high life cycle cost of vehicles and increasing congestion in cities as cars are chosen over public transport, alongside the desire and need to be environmentally friendly, as leading people to alternative modes of transportation. This means a fundamental role change for fleet managers.

On top of looking after company vehicles, fleet managers will now oversee a wider variety of transport options, not to mention learning about new mobility technologies. As travel needs change with new working practices, combined with the influence of environmental consciousness, flexible approaches to mobility and policy will be essential. Plug-in hybrid electric vehicles (PHEVs) are one key example, as government incentives, OEM supply and emissions regulations drive adoption.

‘Maybe the leasing will be over five to six years into the future because you will be driving less,’ said Alain Duez, co-founder of let it fleet. ‘It could also be that you will have more hybrid cars because driving less means that it will be more in favour of the hybrids tomorrow.’

wim-buzzi headshot co-founder let it fleet
Wim Buzzi, co-founder, let it fleet

‘If we look at what the market is offering, you cannot do without the plug-in hybrid, because there is not enough offering yet,’ explained Wim Buzzi, co-founder of let it fleet. ‘It is a good technology. But if you’re going to allow your people to drive plug-in hybrids without recharging them, then you have a crucial error in your policy.’

This opens up the potential for the creation of specific strategies to deal with how these vehicles are used, in line with day-to-day operations. For example, over-reliance on the internal combustion engine (ICE) could render a PHEV’s electric capacities pointless if not properly utilised, making its green credentials effectively null and void. Companies could lay out comprehensive policies for when, where and how to recharge, all dictated by how the car is driven. Equally. the employee could simply submit their fuel bill, so long as it reflects responsible use.

This also lays the road for onboard technologies, like telematics and smartphone applications, all allowing fleet managers to determine employee travel patterns. Accompanied by open communication and transparency, this would help assess the potential options for reducing costs and emissions without affecting efficiency or productivity. However, while driver behaviour might change as well as powertrain technology, the basic need for mobility will not.

‘Maybe in 10 years’ time, people will not have a dedicated company car parked in their car park every day, and they will have a subscription model. But they will always need the car,’ said Buzzi. ‘So, in whatever form, that car will always be included.’

Online trends drive on-road vehicles

Fleet Electromobility quote 2

COVID-19 also resulted in a surge of online shopping, with 52% of consumers buying more online from domestic retailers and 49% stating they will do so more in the future. But as concerns over the environmental impact of these trends grow, logistics companies are having to double-down on green initiatives.

Deutsche Post DHL (DPDHL) recently announced it is further committing to reducing emissions, in line with its GoGreen programme. By 2050, DPDHL aims to reduce all logistics-related emissions to zero. EVs currently make up 15% of DPDHL’s fleets, an increase of 10% over the last three years. In its 2019 Sustainability Report, the logistics company revealed that it uses over 13,000 vehicles with alternative drive systems, including more than 11,600 EVs.

‘In terms of e-mobility, especially in terms of electrification of our delivery fleet, I believe that we are really one of the leaders in the global market, and we are very proud of that position,’ said Nancy Cui, vice president for global car and van procurement at DPDHL. ‘I think that the percentage of our electric van fleet is, in comparison to the rest of the market, very high, especially in the LCV segment.’ However, integrating EVs into a demanding delivery role did initially invoke some range anxiety.  

‘With the introduction of these electric vans in domestic parcel and letter services, we saw at the very beginning some kind of range anxiety of the couriers,’ explained Lars Pappe, Vice President of eMobility design and development at DPDHL. ‘But pretty soon the drivers found out they have an average route length of only 25 to 40 kilometres a day, while the battery capacity of these vehicles exceeds this by far. So even in wintertime, there is enough battery capacity left to return to the depot.’ This realisation, coupled with proper route planning and staff training packages, helped reduce driver range anxiety to a minimum.

Alongside its delivery vehicle subsidiary, StreetScooter, DPDHL also has a strong focus on infrastructure. ‘DPDHL Group has installed more than 15,000 charging points throughout Germany in our depots and electrified roughly 13,000 of our delivery routes here,’ said Pappe.

Presently, the logistics company is tasking a dedicated team with assessing DPDHL sites around the world, working out the electrification needs in terms of infrastructure and energy supply.

Going carbon negative

Microsoft began a PHEV project in Germany roughly three years ago, before the implementation of green incentive schemes. The team discovered the powertrain could be a useful tool when tackling fleet emission targets. However, the PHEVs had to make optimum use of their electric capacities, which meant charging them as often as possible, and not over-using the ICE.

This push to make the most of different environmentally-friendly technologies will be essential for Microsoft as it looks to meet its own green targets. At the start of this year, the computing giant announced it will become carbon negative by 2030, and, by 2050, will have removed all of the environmental carbon it has emitted, either directly or by electrical consumption, since it was founded in 1975.

To combat this, Microsoft is working on a number of measures. It is forming new strategic alliances with existing partners like Shell, to secure supplies of renewable energy. It is extending its internal carbon tax to tackle indirect emissions, as well as electrify its global campus operations vehicle fleet by 2030. How the company goes about acquiring vehicles like these for its fleets involves a rigorous procurement process.

‘We work with a selected number of OEMs,’ explained Michael Pohl, senior procurement engagement manager fleet at Microsoft. ‘We tender them every three to four years, which we just did last year, and now the result is a new setup. With those OEMs, we work closely on our strategy, on discounts, on bonuses, and on agreements.’

‘Some OEMs do offer discounts for electric vehicles, but this is not common, and they are not in the same league as the discounts on standard drivetrains. Of course, every OEM is keen for us to purchase as many electrified cars as possible, because it will help them with their CO2 emissions and potential penalties they have to pay to the EU, but they cannot necessarily deliver the number of cars we would need in a given or required timeframe.’

Essential infrastructure

Fleet Electromobility quote 1

As EV demand builds momentum, OEMs must boost manufacturing processes to keep pace while suppliers incentivise sales. These measures will have to go into overdrive as consumers and fleet managers alike begin to see the long-term benefit of electromobility. One of these benefits is the overall cost of owning an EV.

At the end of September, LeasePlan released its annual Car Cost Index, which reveals the true cost of owning a car, including fuel, depreciation, taxes, insurance and maintenance. EVs in the compact and mid-size segment are fully cost-competitive compared to ICE-powered vehicles in countries including France, Germany, and the UK. Autovista Group analysis also reveals that B-segment and C-segment BEVs are competitive compared to petrol models, albeit only because of government incentives.

‘The good news is that the costs of EVs are coming down and we are seeing the development of a strong second-hand market for quality used EVs,’ said Tex Gunning, CEO of LeasePlan. ‘The bad news is that governments are failing to provide the charging infrastructure necessary to satisfy market demand.’

In a recent blog post, Mathijs van der Goot, global lead on EVs for LeasePlan said, ‘it is essential to ensure that the charging infrastructure is aligned with the flourishing e-mobility market.’ There are currently more than 195,000 public charging in Europe, a rise of over 300% since 2014. But this falls a long way short of how many the industry needs. Last year, LeasePlan called for one million charging stations by 2025 and the European Commission estimates 2.8 million will be required by 2030.

A report filed by Technology intelligence company IDTechEX in September outlines the unique demands fleets could have on EV infrastructure. ‘Although electric fleet charging represents roughly 3% of the total charging infrastructure in volume, it constitutes over 20% of the total market value due to the added cost associated with the high-power requirements,’ the report states.

So, the need for improved charging infrastructure to support fleet electrification is vital, even as EVs become more affordably priced. If fleet managers are going to adopt these vehicles on a wide scale, charging anxiety will need to be tackled alongside shrinking price tags. Subsidies and governmental schemes will help tackle this challenge, but the advancement of charging technology will also play its part. But will this be the only big tech change coming to fleets within the next few years?

Want to know how COVID-19 has impacted fleets? Catch up with the series by reading the first instalment here.

Podcast: Tracking automotive markets, recalls and emissions

In its latest podcast, the Autovista Group Daily Brief team discusses the new Monthly Market Dashboard, plug-in hybrid (PHEV) recalls and manufacturer emissions targets…Autovista Group · Tracking automotive markets, recalls and emissions

https://soundcloud.com/autovistagroup/mmd-recalls-and-emissions

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Brexit survey: have your say

There are only 70 days until the UK’s Brexit transition period with the European Union (EU) comes to an end. Currently, there is still no certainty on future trading relationships, or how the UK setting its own regulations will affect businesses and technology developments in the coming years.

Autovista Group wants your views on Brexit, from the impact a ‘no-deal’ would have on the automotive industry in both Europe and the UK, to your opinions on how the two parties have managed the process.

Click here to access our Brexit survey, and tell us how the negotiation uncertainty and the UK leaving the EU is impacting your business and industry.