With the tensions between India and Pakistan escalating, the summit between those two calm and rational individuals, President Trump and Kim Jong-Un breaking up and the ongoing and seemingly interminable Brexit shenanigans, I thought this would be an appropriate time for some good news and to highlight a revolutionary change to our lifestyle which is just around the corner but is probably under most people’s radar.

In 2014 less than 0.6% of cars sold in the UK were plug-in electric cars; in 2018 it was 3.8%.  An impressive increase but with 96% of sales being non-electric still pretty much a niche part of the market and unlikely to be mainstream any time soon. 


We are fast approaching a tipping point where electric car sales will be greater than internal combustion engine models.  In less than five years I suspect anyone buying a new petrol (or diesel if they exist) vehicle will be in the minority.  In fact it has been predicted by as early as 2026 virtually all new mainstream car sales will be electric.

The reason for this, as is the case in all new technology adoption, is economics and technology.  Every time a new technology arrives the initial cost, and the fact that it often has a few snags, means there are few early adopters.

If you think back to the 80’s the first mobile phones were extraordinarily expensive and compared to what we are used to now ridiculously basic.  They were seen as a status symbol and a necessity if you wanted to be considered a yuppie (remember them).  The cost and the fact the initial rates of sales were relatively slow meant in the mid 1980’s it was predicted that there would only be 900,000 in circulation in the USA by the year 2000.  In fact there were over 110 million.  They are now so prevalent that it is not uncommon to see homeless people with one, something that would have been unbelievable when they first came on the scene.

The rapid improvement in technology both in terms of power storage and cost means the speed at which electric vehicles become ubiquitous will be far faster than the time it took the mobile phone.  In the last week we have seen Honda announce they are closing their plant in Swindon to instead focus on electric cars made in Japan and a couple of days ago Porsche said the new version of their best-selling model, the Macan, will be all-electric.  Now when a company that is the idol of many petrol heads say they will be producing an all-electric car it is time to sit up and take notice.

Car manufacturers across the world are investing billions in the development of electric cars.  They are closing plants that make diesel engines and no doubt in the coming years will do the same with petrol engines.  I suspect in years to come we will look back at our current cars the same way we look at the Model T Ford today.

Why the rapid change?  Cost.  We are now at the point where electric cars are virtually the same price to buy but 90% cheaper to run than petrol and diesel cars.  They have only 18 moving parts, require no servicing, can last for 500,000 miles and are 95% efficient.  Petrol and diesel cars have over 2000 moving parts, require servicing every 10 or 20,000 miles, last on average 150,000 miles and are only 20% efficient.  Oh and let’s not forget they create noise and air pollution.  Do you still doubt this change is coming?

So what does this mean?  Well the recent announcements by Nissan and Honda in the UK are I suspect the tip of the iceberg.  It also means there could be a major fall in second hand car prices of petrol and diesel versions as electric cars become more attractive.

As for how we produce the electricity to run them I will give you the good news on that in the next couple of months (events in the first paragraph willing!).

Steve Forbes
Managing Director
Alan Steel Asset Management Ltd is authorised and regulated by the Financial Conduct Authority

The Financial Conduct Authority does not regulate tax advice

This letter is the personal view of Steve Forbes. Please check the appropriateness to your individual position with your adviser before taking or refraining from any action.