Lured by higher profit margins, Melrose Industries has outlined plans to invest around £250-300m in the electric vehicle sector
As diesel sales continue to plummet, the electric vehicles ecosystem is developing fast in the UK, with manufacturers, insurers and corporates announcing major investments in EV travel this week.
First off the starting blocks was manufacturing giant Melrose Industries, which yesterday outlined plans to invest between £250m and £300m in the electric vehicle sector over the next five years. The FTSE-100 business said the investment should deliver significantly higher revenues from developing driveshafts for battery cars than for petrol or diesels.
Melrose specialises in the acquisition of manufacturing businesses, and bought UK engineering giant GKN in a controversial £8bn deal last year.
Its investment plans look set to boost the performance of its automotive and aerospace divisions, earmarking a 10 per cent profit margin from GKN's automotive division, and a 12 per cent target for its aerospace division over its five-year ownership strategy. There are plans to invest over £50m a year in factories for making electric car parts, the Financial Times reports.
At present, only around one per cent of GKN's business caters for electric vehicles, with most of its parts made for fossil fuel cars, but the company said it is "well positioned" to benefit from growth in the EV business.
Melrose said it envisaged supplying around £2,500-£3,500 of battery car parts per vehicle, and around £1,500-£2,000 worth of parts in hybrid vehicles. In comparison, it forecasts being able to supply only £60-120 of driveshafts for conventional internal combustion engine cars.
The news came just ahead of the latest car sales figures from trade body SMMT, which again showed diesel car sales dropping by 21 per cent in March compared to the same period a year earlier. Overall car registrations fell 3.4 per cent, which SMMT put down to "political and economic uncertainty and continuing confusion over diesel".
Meanwhile, demand for alternatively fuelled vehicles such as EVs and plug-in hybrids increased by 7.6 per cent with 25,300 new registrations, marking the biggest March sales volume on record.
"With almost 40 plug-in models on the market in the UK, and over 20 more expected to arrive in 2019, demand for these new technologies is expected to continue to grow," SMMT said.
Demand for electric cars is also sparking a new market for satellite products. Yesterday saw the launch of the UK's first car insurance product specifically designed for electric vehicles.
Announced on Tuesday by insurer LV, the policy provides EV and plug-in hybrid drivers with cover for home charging cables and wall boxes, as well as UK-wide recovery for customers who run out of battery charge while out on the go.
LV said internal research suggests more than a quarter of drivers expect to buy an electric car within the next five years, prompting it to develop a bespoke insurance offer to address the "distinct needs of these drivers".
"If we are to help make people feel more comfortable with the shift to electric vehicles over the next few years, then insurance must keep pace," said Martin Milliner, claims director at LV General Insurance. "Electric cars have very specific needs. Our new insurance addresses this and drivers can be confident of making the change to these cars of the future, knowing they have the right cover to protect them."
But as battery ranges grow longer, the anxiety of running out of charge mid-way through a journey may soon be a distant memory. Scientists in Germany today announced they are developing what they claim is the world's first 1000Wh/kg rechargeable battery for electric cars.
German developer Innolith Energy said its battery, which it hopes to bring to market within the next three to five years, will be capable of powering an EV for over 1,000km on a single charge, using new non-flammable lithium-ion technology instead of flammable organic electrolyte used in conventional batteries.
The firm also said it had developed a means of producing the long-range batteries in a way that could cut manufacturing costs in half compared to conventional EV batteries, "due to the avoidance of exotic and expensive materials combined with the very high energy density of the system".
Sergey Buchin, CEO of Innolith AG, said the EV market was currently being "stymied by the limitations of available batteries". "Consumers want an adequate range on a single charge in an affordable EV, and confidence that it is not going to catch fire," he said. "The Innolith Energy Battery is the breakthrough technology that potentially can meet all these needs."
While research suggests many consumers aren't quite ready to make the leap to a battery electric vehicle, corporates are busy laying the groundwork to prepare for a mass switch. Insurance giant Aviva today announced the completion of a solar carport project at one of its offices in Norwich, where almost 1,900 panels PV panels have been installed by specialist firm RenEnergy covering around 250 car park spaces.
The panels will generate an estimated 542,000kWh of electricity each year, which will be used to power Aviva's office at its Broadlands Business Park.
The firm said it would use 91 per cent of the green energy generated by the solar panels, with the excess power sold back to the grid. Each car-parking space will be 'EV-ready', Aviva added, in preparation for its employees switching to electric power.
"It's a fantastic design that delivers on the environmental benefits without impacting on space," he said. "It's ready for the future with the electric vehicle revolution just around the corner," said Stuart Wright, Aviva's property and facilities director.
With greater profits envisaged for engineers in the electric car market, slowing sales of diesels as battery cars surge in popularity, and insurers and tech firms now developing solutions to combat EV range anxiety, it seems the EV economy is heading into the fast lane.
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