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An analysis from the Financial Times outlines why cost is crucial to encourage the switch to electric cars, motorists are warned to top up ahead of petrol price hikes and VW names new Chief Executive.

The Financial Times

Costs, not the environment, will drive switch to electric cars

The switch to electric vehicles is often viewed as a result of government efforts to reduce CO2 emissions. But electric vehicles will soon become the cheapest option for many buyers of cars and commercial vehicles, regardless of environmental targets. Cost, not carbon policy, will drive mass adoption.

Emerging markets are already leading the way, and the rest of the world will follow. Many analysts assumed that emerging markets would lag behind European and North American rates of electrification. In fact, commuters in countries such as China will electrify more quickly. Small, low-powered electric vehicles, including two and three-wheelers, are ideal candidates for electrification because their light weight means they can run on comparatively cheap batteries.

Electric cars with high mileage such as taxis can achieve big savings right now. For example, it is up to 30 per cent more expensive for a London taxi driver who bought a diesel-engined taxi in 2017 to operate it compared with his counterpart buying a new electric taxi today. New charging solutions will increase such savings. Even low-mileage drivers will soon find that hybrid vehicles are comparable to diesel-engined cars. Most analysts expect the on-the-road price of a new hybrid to match that of a diesel car by the mid-2020s.

Manufacturers such as Volvo and Peugeot are committing to offering hybrid versions of all their models. Volkswagen and BMW are developing electric-only cars, bringing closer similarity in cost.

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Daily Mirror

Motorists warned to top up now ahead of petrol price hikes this weekend that could affect millions

Petrol prices could soar by 2p a litre this weekend as tensions over the Middle East escalate, experts have warned. And further rises of up to 5.5p a litre are around the corner as wholesales prices have rocketed by 4p a litre in less than four weeks.

On Thursday, oil prices were at a three and a half year high of almost $72 a barrel sparking fears that motorists will be hammered at the pumps. The AA is urging drivers to fill up ahead of the weekend as prices for unleaded could rise from 121p per litre to 123p and diesel leap from 123.61p to 125.61p by Saturday. And industry body the Petrol Retailers Association (PRA) said a 4p per litre rise in wholesale costs will filter through to the forecourts.

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BMW and Mini launch pay-as-you-go subscription service

BMW and Mini have launched a subscription service that rolls all the costs of car ownership into monthly instalments.

Payments, which start from £131 per week (equating to around £568 a month), include the costs of insurance and maintenance, as well as breakdown cover, as one bill.

Although BMW is the first major car maker to offer such a service in the UK market, it is not the first brand overall. Polestar, Volvo’s stand-alone performance division, will sell its cars exclusively this way.

BMW and Mini’s service is operated by car subscription company Drover and features several models from both brands. At the entry level is the Mini Cooper 3dr hatch and BMW 116d Sport, while the largest cars on offer include the BMW 5 Series and X3.

Customers can swap, upgrade or downgrade their cars at any time or cancel their contract altogether, with no finance-style long-term commitment or down payments. Chris Brownridge, BMW UK’s sales boss, said this puts the BMW group “at the forefront of such development”.

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Carmakers fear rising trade barriers after Brexit

A storm is brewing as clouds gather over Bristol Port, with the rain set to fall on tens of thousands of vehicles parked in the port’s car compounds, ready for export by ship, or destined for UK dealerships. It is an apt backdrop for the UK automotive sector’s current predicament.

“Brexit has derailed the industry,” says Sarwant Singh, senior partner and global head of automotive and transportation at consultants Frost & Sullivan.

“The uncertainty causes people not to buy cars.” The number of cars sold in the UK dropped 5.7% in 2017, according to industry body the Society of Motor Manufacturers & Traders, and ratings agency Moody’s predicts a further 5.5% fall this year. There has been little respite from foreign markets, with exports slipping 1% last year.

Each year, about 80% of the vehicles built in the UK are exported, so smooth international trade relations are vital for the automotive sector’s continued prosperity.

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The Telegraph

Volkswagen names Herbert Diess as new chief executive

Volkswagen Group has announced Herbert Diess will take the top job at the German car giant as Matthias Mueller steps down after leading the company through the aftermath of the emissions scandal. The supervisory board of the company – which also owns the Audi, Bentley, Porsche, SEAT and Skoda marques – pulled forward a board meeting scheduled for Friday to make the changes, which also involved reforms of the structure of the huge company. Volkswagen said it was breaking the business into six new vehicle divisions and a special portfolio for the China region.

Mr Diess, previously head of Volkswagen cars division, joined VW Group from BMW just months before the “dieselgate” scandal broke in 2015. He was widely seen as the natural successor to Martin Winterkorn, who resigned from the top job five days after the scale of VW’s deception over emissions became clear.

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Posted by Sue Robinson on 13/04/2018