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The UK EV Market

In total, there are an estimated 660,000 electric cars on the road in the UK, plus 445,000 plug-in hybrids (PHEVs). Electric car sales increased by 40% in 2022, and more than one in ten new vehicles were electric. Crowdfunding had a key role to play for a number of new car makers who entered the market and continues to play a major role in the development of an electric vehicle infrastructure.

Latest vehicle stats confirm the market is booming. More battery electric vehicles (BEV) were sold in 2022 than ever with 267,203 registrations (16.6% of all new car sales), while 101,414 plug-in hybrid electric vehicle sales (PHEVs) made up 6.3%. Electric vehicle sales are expected to reach 637,000 units in 2027.

The UK government is committed to halting the sale of new petrol and diesel cars in 2030. By then, the latest Citi State of Global Electric Vehicle Adoption report forecasts Europe will have the highest rate of electric vehicle use in the world, edging ahead of China.

Let’s look at some crowdfunding campaigns that have helped, and are helping, a range of startups in the electric vehicle sector and its support infrastructure.

Electric Vehicles

Tesla

Crowdfunding contributed to keeping electric vehicles in the media spotlight – good crowdfunding is good marketing. In 2016, Elon Musk made headlines through running the biggest crowdfunding campaign ever. 276,000 people registered interest in purchasing a Tesla car, and paid a $1,000 deposit. That meant Musk had brought in $276 million to continue developing his product, and establishing supply chains and a production line. There were opportunities for people to later cancel their order as production timetables slipped. Nevertheless, a crowdfunding campaign that generated $10 billion worth of orders was a record breaker.

Commercial vehicles

UK startup Electric Assisted Vehicles (EAV), as an example, has created a range of delivery vehicles, referred to as eCargo bikes, to be used particularly for last-mile deliveries within emission-regulated inner ring roads of cities and towns. They fill a gap between vans and bikes. Their customers already include Amazon, Fedex, Evri and Veolia. A taxi version will be able to carry two people or a wheelchair passenger.

EAV intends to conduct a Series A funding round by the end of Q1 2023, with a £7.5 million target. Prior to this, and within the £7.5m target, an equity crowdfunding campaign closed in January 2023. It raised over £880,000 on a convertible loan basis from nearly 500 backers. When a share price has been established, the loans will be converted to equity at a 20% advantage. EIS tax relief is also available. The size of individual investments ranged from £20 to £250,000.

An EAV delivery vehicle. Image source: EAV

Battery and charging point infrastructure

Mineral extraction

Electric vehicle batteries require minerals including lithium, cobalt, manganese, nickel, and graphite. Shortages and/or high prices could make it more difficult to meet government electric vehicle take-up targets, and manufacturers’ sales targets. The UK is currently totally reliant on imports of lithium. Lithium is the ideal metal for batteries given its high electrode potential and low atomic mass, giving batteries a high charge and power-to-weight ratio.

Cornish Lithium was launched in 2016 to explore the old mine and quarry workings in Cornwall, and develop plans to extract lithium from geothermal waters and hard rock on a commercially viable basis. From 2019 to 2022 the startup turned to private investors through offering equity via crowdfunding. In its last round, Cornish Lithium raised almost £12.5 million, and crowdfunding has raised over £25 million in total for the company. The day will arrive when big development investment is required, though in the meantime, small private investors have bankrolled the earliest stages of this startup at the forefront of a new British business sector.

Battery charging points

The charging infrastructure is failing to keep up with the rapidly growing EV ownership. Even though most charging is done at home, there are real concerns over charging delays when away from home. Media reports over Christmas and New Year included Tesla drivers queuing for three hours. The government forecasts the UK will need between 300,000 and 720,000 charging points by 2030. Meeting the lower figure requires installing 100 chargers a day. The current rate is about 23 a day. Also a third of British households do not have off-road parking to use their own wall-mounted chargers. Crowdfunding is being used to improve the situation.

Here’s the story of the Iduna Electric Vehicle Charging Infrastructure plc, which in 2021 raised £4m in just six days on the Abundance Investment crowdfunding platform. They offered 5-year secured debentures – which are regulated and tradeable bonds – that would pay 9% interest per year over the life of the investment. The money financed the installation of 50 new EV chargers in Greater Manchester.

In January 2022, having established the support of both the general public and councils throughout Greater Manchester, Iduna approached accountancy giant EY to attract £100m of investment They also ran a second crowdfunding campaign on Abundance later in the year, and this time raised £6.5m to install a further 65 chargers.

In October 2022, Octopus Energy Generation, one of Europe’s largest renewable energy investors, announced it had allocated up to £110m for the Manchester-based public EV charging network Be.EV (which is operated by Iduna) to scale and install new charge points across the UK.

Iduna founders Adrian Fielden-Gray and Asif Ghafoor. Image source: Be.EV.

Another startup making progress in this sector is Urban Electric. In 2019 they raised £480,000 from over 900 investors through a round of equity crowdfunding. At that time they were working with the local authority in Oxford, and had signed a Memorandum of Understanding with the Dundee and Plymouth City Councils. In November 2022, a local paper in Dundee reported twenty-one new EV chargers could be installed across the city if a contract with Urban Electric is approved by the City Council.

Another example is Camden Council in North London using civic crowdfunding to install EV charging points. They also used the Abundance Platform to let individuals lend them money to accelerate their charger installation programme.

Battery Swapping

An alternative to the amount of time taken for each motorist to charge their own battery would be to swap a depleted one for a fully charged one in the same amount of time as filling a petrol tank. A working version of battery swapping already exists in China, and Bosch and Mitsubishi have recently announced a partnership to explore batteries as a service.

Eloy, based in Hertfordshire, propose battery swapping as one of several innovations to make driving easier through connected “smart cars” and artificial intelligence. They are preparing to launch a crowdfunding campaign to accelerate their growth.

About Us

CrowdInvest will be a cross-border equity crowdfunding platform offering UK-based sophisticated investors opportunities to invest in impact-driven, high-growth tech startups operating in emerging economies. You can join the waitlist today at https://www.crowdinvest.com/ to stay up to date with developments on how to be involved.