New prices, new batteries and more chargers: 2023 for Electric Vehicles

By Tom Rowlands,  above, Managing Director, Global EV Solutions at FLEETCOR

There has yet to be a year when electric vehicle (EV) sales haven’t hit a record high – with the cut-off point for the sale of new internal combustion engine (ICE) cars and vans looming, more people than ever are choosing to go electric. We’ve seen significant increases in the amount of EV charging that our customers are using, though petrol and diesel still make up the overwhelming majority of commercial fuel spend.

However, it has also been a volatile year for fuel overall: fuel prices have surged, and because the UK’s fuel mix is still heavily weighted towards fossil fuels the price of electricity used to charge EVs has similarly increased, however, this hasn’t reduced the uptake or use of EVs. We are also seeing the economic conditions for buying new EVs change: interest rates are up, investment in new ventures is more difficult and supply chains are still disrupted. The latter is a particular problem for the supply of batteries, which are vital to both new EVs.

With all this in mind, plus our experience from working with commercial fleets across the country, let’s look ahead at what 2023 will mean for EVs.

  • UK Tax and global price changes

So far, EVs have been made more attractive to both the public and fleets through a suite of tax breaks and other incentives, but these were never going to last forever. Vehicle Excise Duty is due to be reinstated for electric vehicles in 2025, so there could be a rush to capitalise on the discount while it is still in effect, especially amongst fleets who need to maximise their vehicle spend.

Benefit-in-Kind rates, in short a tax on company cars, will also be increased in 2025. It currently sits at 2% for most electric and low-emission vehicles, but in 2025 it will increase to 3% and then by an additional 1% until 2027. This too makes EVs more attractive in the next two years.

  • Electric SUVs

Until recently, the argument in the EV space has been that weight significantly reduces range. Therefore, EV technology is best placed to power smaller city cars or sedans. However, 2023 will see the release of vehicles like BMW’s iX1, Jeep’s Avenger and many other larger form EVs.

There are a number of trends driving this change: vehicle bodies are getting lighter, batteries are becoming smaller (allowing vehicles to pack more in) and with the increase in rapid and ultra rapid chargepoints, charging stations are becoming more powerful and more common. The last factor is particularly important (and one we will cover in the next section), as battery technology has largely plateaued until a major breakthrough comes.

  • How the supply chain will bring opportunities

All the disruptions in 2022 meant that batteries and the components with which to create batteries (particularly rare earth metals like Lithium), were harder to acquire. This has meant that some start-up EV companies have had a difficult time acquiring materials when compared to legacy companies with established relationships. With battery power being a vital ‘cog’ in the performance of an EV, there are more start-ups looking to find the perfect formula – which could bring in new entrants to the market.

More of these battery companies are going to be onshore, based in Europe or the US, and their creation is going to be accompanied by renewed efforts to explore for more raw materials.

  • Filling in the gaps in charging

As we see from our partner Zap Map, there are an increasing amount of EV chargers across the UK, and this will increase ‘tenfold’ by 2030. Even if installations of new chargers stopped today there would likely be enough public charging capacity for everyone in the UK, and the new capacity is likely to be mostly in homes and businesses.

There is also significant investment to be made in Rapid Charging. If EVs are going to replace ICE vehicles then they will need to be able to be charged in minutes, not hours, so building new rapid charging points and upgrading existing capacity will be vital.

Staying at the forefront of EV developments

As a company, we’ve strived to be at the forefront of the sea-change in the way that companies and individuals fuel their vehicles. The changes we make as a company are going to have an effect on thousands of fleets across the UK – especially the growth of our EV network, which passed 10,000 charging points at the end of 2022, giving fleets the confidence that their vehicles will always be able to find a place to charge.

Coupled with strategic acquisitions, such as Plugsurfing, a technology company that over the past ten years has worked to democratise access to EV charging, as well as the growth of our home charging solution, these developments will enhance the overall experience for all companies running an EV fleet.

Taken together, these developments mean that we might see another record-breaking year for EV sales, and we will definitely see an increase in EV use and the development of charging infrastructure.

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