Future looks bright for electric cars, says Quilter Cheviot

Scottish Government plans to phase out new petrol and diesel vehicles by 2032 will spark investment in electric rivals, according to wealth manager Quilter Cheviot.

Nissan shows off its new Leaf electric car. Picture: Kazuhiro Nogi/AFP/Getty Images

Mark Hallam, head of the firm’s Edinburgh office, said the opportunities expand to “traditional auto and component manufacturers and companies” as well as car manufacturers.

• READ MORE: Scotland to phase out petrol and diesel vehicles by 2032

Pointing to industry figures showing a 23 per cent rise in sales of hybrid and electric cars last year, Hallam said: “The future looks bright for electric vehicles.

“For the time being, however, they still represent a relatively small percentage of overall vehicles sales, and this should be borne in mind when it comes to investing in this sector.”

Nissan this week announced a new version of its top-selling Leaf, with prices starting at about $29,000 (£22,150), undercutting the Tesla 3, which weighs in at $35,000.

Other Japanese car companies have not been as bullish on electric vehicles. Toyota has been more aggressive about gas-electric hybrids and is expanding to plug-in hybrids as well as hydrogen-powered vehicles.

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But Hallam added: “With new entrants continuing to join this exciting new market, it is essential to identify those who will drive innovation, stay the distance and do so profitably. It is also worth widening your scope to consider businesses associated with the manufacture of both hardware components and software for the electric vehicle sector.”

• READ MORE: Surge in Scottish drivers plugging into electric cars

Meanwhile, trade credit insurer Euler Hermes has warned that UK automotive exports could fall by £3.5 billion if a Brexit deal is not secured and ratified by March 2019.

Katharina Utermöhl, European economist at the firm, said: “British industry is enjoying a period of strong growth but the chief concern among the sector’s leaders is leaving the EU with no transitional deal in place, at the very least. For the likes of automotive and chemicals, two of the UK’s flagship industries, the prospect of a no-deal Brexit would have significant consequences for export values.

“Although gains from export sales continue to be made from the cheap pound, businesses are now holding off on investment in new equipment and recruitment. Manufacturers are telling us that rising import costs are starting to put a squeeze on margins, and many are battening down the hatches against the potential increase in financial risk in the supply chain.”

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