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COVID-19, two years on - business agility and consumers’ EV appetite

Volkswagen Financial Services (VWFS) chief executive, Mike Todd

It’s just over two years since the UK first went into lockdown and it’s safe to say we’re all continuing to feel the impacts of the pandemic.

The world has changed a great deal since the spring of 2020, and with life often feeling like an ever-accelerating treadmill, it feels appropriate to pause, take stock and reflect on how the pandemic has shaped the industry.

It’s difficult to know where to begin but for me it’s not necessarily a question of what’s changed over the past two years, but which processes, and trends have been accelerated as a result of life in lockdown. 

And I think it’s best to zone in on two major trends that, above all others, have been fast-tracked in this new normal we all find ourselves in: business agility and consumer appetite for electromobility.

Lessons of lockdown

The pandemic was a completely unprecedented global event that none of us saw coming. It turned the world upside down and highlighted that consumer trends could change more rapidly than many of us had ever expected.

But importantly, it taught us that for businesses to survive – and ultimately thrive – in such a fast-moving situation, leaders needed to adjust, reset and innovate to meet the changing needs of their customers.

For example, at Volkswagen Financial Services UK, we developed and marketed new products quicker than ever, so customers could continue to rely on their current vehicles whilst waiting for the arrival of their newly purchased car.

We're constantly reviewing what we do and by considering what lessons we have learnt during lockdown, we are understanding and creating better ways to solve the current problems of our customers.

The next step is to make sure that we're solving the future requirements of our customers by changing how we think about our offering. Given the unique circumstances of recent global events, I really believe that cornerstones of flexibility and agility should be driving businesses forward in the current climate.

We have to earn the trust of our customers and part of this is understanding how real-life events are creating a completely new set of needs for motorists.

And at a time when the cost of living is increasing, staying receptive is paramount. The result of this changing scenario for many is that larger discretionary purchases such as a new car may be delayed or even cancelled.

It’s my job to ensure that our operational readiness co-exists within a culture of innovation. Our business will be judged on its ability to respond, adapt and evolve to and through challenges swiftly and effectively. And ultimately our customers will be the judge.

The second major trend as a result of the pandemic, in my opinion, is the gear-change in demand for electric cars.

EV opportunity

Emissions fell by up to 31% during lockdown – levels not seen since the 1970s – with clearer skies and lower pollution levels guiding our pivot away from a carbon economy.

I believe there is a real opportunity for the automotive industry to capitalise on this renewed appetite for carbon reduction and of course the goal for many consumers is the zero-emissions car.

In a positive step on our journey to mainstream adoption of electric vehicles, the Government last month outlined how it will spend £1.6 billion to deliver a network of 300,000 EV charge points by 2030.

It’s imperative that the UK’s charging infrastructure keeps pace with the rapid growth of sales of these cars and this investment, which represents a tenfold increase in the current number of publicly available points, is massive news.

We know demand for EVs is at an all-time high and at Volkswagen Financial Services UK alone, we’ve seen yearly finance cases for battery electric vehicles (BEV) surge 160% from 2020 to 2021.

The Volkswagen Group is continuing its successful electric offensive and the latest wave of outstanding EVs our brands are rolling out – such as the Cupra Born and ID Buzz – has sparked a lot of interest.

But the interesting part for me is that I really believe the pandemic has put electric cars in the spotlight and boosted demand in a way that might not have happened otherwise.

Affordable mobility

People have had lots of time to reflect on their lifestyle choices over the past two years, and in many cases, have made a conscious effort to be more environmentally friendly.

In fact, our research shows that more than a third of Brits (38%) are living more sustainably, such as buying more plastic-free products and recycling more, since the COVID-19 pandemic.

So, what does all this mean for the future of electromobility in the UK?

I think our collective transition to electric vehicles has been accelerated by the pandemic and with the EV market in overdrive at the moment, the industry must do everything it can to make the switch as simple and as affordable for as many people as possible.

We have our own products such as Lease&Care to ease consumers into the transition, but to eradicate the central barrier to EV ownership, charging anxiety, we need the government to do more to ensure drivers have confidence that they can charge their vehicle quickly and safely regardless of where they live in the UK.

Author: Volkswagen Financial Services (VWFS) chief executive Mike Todd

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