From Yahoo Finance: 2025-04-30 11:00:00

Battery electric vehicles are gaining popularity in the UK, with growing infrastructure, stable residual values, and lower costs. Hydrogen cars, on the other hand, face challenges with limited market demand and infrastructure. This shift is affecting lending models, prompting motor finance providers to adjust products and pricing for an electric future.

The UK is moving away from internal combustion engines towards electric vehicles (EVs) and hydrogen fuel cell vehicles (FCVs). Financial services are adapting to this shift, with implications for leasing, risk management, and vehicle insurance. By the end of 2024, there will be over 1.3 million BEVs and 740,000 PHEVs on UK roads compared to fewer than 130 hydrogen cars.

EVs are outpacing hydrogen vehicles in the UK due to better infrastructure and consumer demand. Finance providers are favoring EVs due to stable resale values, manufacturer warranties, and growing consumer interest. Hydrogen vehicles present uncertainties in production costs, infrastructure, and consumer confidence, making them less attractive for funders.

EVs offer lower running costs with overnight charging tariffs and improved total cost of ownership. EV drivers benefit from convenience and lower ongoing costs, making them more attractive to customers. Insurers have adapted to EVs, stabilizing premiums and offering competitive rates, while hydrogen vehicles face challenges due to lack of data and repair infrastructure.

The UK’s EV charging infrastructure is well-established, while hydrogen refueling networks require significant investment and public adoption. EVs are more energy-efficient than hydrogen vehicles, converting over 70% of input energy into motion. This efficiency, combined with infrastructure and cost considerations, makes EVs a more strategic choice for motor finance.

The electric revolution is reshaping the motor finance industry towards EVs, with tailored products and services for electric mobility. While hydrogen may have niche uses, the evidence points towards battery electric vehicles for personal transport. Finance providers are urged to adapt to the changing landscape to remain competitive in the evolving market.



Read more at Yahoo Finance: Motor finance turns electric as hydrogen stalls