Glass’s forecasts UK registrations of "green" powertrain technology in 2020 will be just under 2.4 million vehicles, of which 11% (274,000 units) will be electric vehicles (EVs), and 10% (235,000 units) hybrids.

The firm also predicts that the combined 21% market share for EVs and hybrids in the UK in 2020 will be lower than in Germany (265 of total new car sales) but the same as in France and Italy. Of the five biggest markets in Europe for car sales, Spain is expected to see the lowest adoption of "green" car technologies by 2020, with a combined market share of 20% for EVs and hybrids.

A key challenge for many vehicle manufacturers is the proportion of electric vehicles that make up their overall sales mix, as they look to encourage adoption of electric and hybrid vehicles, including plug-in hybrids.

Glass’s also says that it recognises that the industry is still evolving the best way to deal with predicting the residual value impact of the cost of batteries, the risk of substitution with improved technologies and the end of life disposal / secondary use options.

The firm states that assessing the residual value of an electric vehicle largely depends on its relative total cost of ownership compared with alternatively powered vehicles and the newer models entering the market when it is first sold as a used vehicle – the methodology is, in principle, no different to assessing any other vehicle today.

Glass’s suggest that to drive adoption, vehicle manufacturers will need to develop strategies to remove most of the residual value risk of the battery from the consumer.

Its suggestions comprise:
• Long Warranties – Long warranty periods (8 years +) are key. Create a standard for battery quality measurement linked to minimum charge levels (80% certified capacity or replacement).
• Battery Buy Back – Schemes allowing early adopters to swap the battery units to newer technology at a reduced cost.
• Manufacturers leasing the battery – The manufacturer effectively underwriting some of the residual value risk on the battery, though this raises "shared ownership" issues that need to be resolved by the industry.

Andy Carroll, managing director of Glass's, said: 'The basic framework for dealing with these issues remains pretty much the same, but how the industry responds to the battery residual value issue will be key to consumer confidence and the adoption rate of electric vehicles.'