During 2019 the UK enshrined in law their pledge for a green future. In this future, the UK’s emissions by 2050 must be net zero. If not, the UK will breach it's own laws and UK citizens will be able to seek a judicial remedy to force the government to obey it's own laws.. One way in which we can see this new law put into action during 2020 is the government's plan to put an end of the sale of new petrol, diesel or hybrid cars in the UK. From 2035, no new cars of these type can be sold. But what does that mean for consumers?
Affordability is likely to be a constraint to car ownership
in the future. The current average price of a car is £10,500, rising to £15,400
for finance purchases. This is significantly lower than the starting price of
electric cars. The Nissan Leaf, the UK’s most popular electric car, prices start
at £26,000.
Not only do electric cars cost significantly more, but
owners also take on the liability of recharging them. Within the UK there would
need to be 25 million charging points if all cars were swapped to electric by
2050. Currently there are 11,000 located predominantly within London and Scotland.
The cost of these additional charging points is roughly £300bn, around the same
cost as coronavirus to the UK.
We have seen over the series of “Is Car Ownership the Way of
the Future?” that average household income is £30,420 and that annual car costs
are £4,500 - about 15% of household income. Therefore, from 2035, the answer is likely to be no because cars are set to become unaffordable. Car ownership appears
set to be a thing of the past by 2050.
However, there in lies an opportunity not only for business
but for individuals. If 31 million drivers took a 15% increase to their
disposable cash, what would society look like?
There are many steps that need to be put in
place before we are ready to stop owning cars. We have all experienced
freedom now and few will want to give this up. This creates a long-term opportunity for businesses.
Companies such as Enterprise Car Club are already capitalising on this growing
area. They offer day hire for vehicles at a fixed rate which includes all
costs, including fuel, at a price as low as £30. While this has been a preferred
option within cities where parking is limited and many car hire options include
free parking, in towns adoption has been sluggish.
Without the guarantee of personal liberty and spontaneity that accessible electric car hire can offer, renting over owning will not succeed. A shift in societal expectation also needs to evolve by 2050. While we have all had a glimpse of a car free life during 2020, only 2% of trips involved cycling and 27% walking. Perhaps 2020 will be the tipping point for us to reassess our day to day activities. If cycling to the destination can be both beautiful and safe, a post coronavirus world could see the 2% increase. This not only will give more available cash to the individual, but also eliminate the stress of driving and help reverse health effects of a sedentary lifestyle. However, this will also mean less distance can be travelled. Rather than an hour’s drive for a spontaneous day trip, we might instead have an hour’s mindfulness walk.
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