©Themoon EXAM SOLUTIONS
22/11/2024 11:25AM
Edexcel A Level Business Paper 3 - UK Car
Market Solutions
Current trends in the UK car market - growth of EVs - Answers✓✓The number of EVs
registered in the UK has been growing rapidly in recent years.
Expected to continue to do so in the coming years.
In 2022, there were over 100,000 EVs registered in the UK, up from just over 30,000.
Contextualise: 860,000 passenger cars produced in 2022 (11.6% are EVs and 17.9% are
Hybrids).
Why has this growth of EVs occured? - Answers✓✓Key reason --> Price of buying/owning
EVs has fallen.
Society of Motor Manufacturers and Traders (SMMT) said the average price of an EV in the
UK fell by 10% in 2022.
Why has the price of an EV fallen? - Answers✓✓1) Falling cost of batteries
Advances in battery technology - battery technology has been improving rapidly in recent
years. This has led to the development of new battery materials that are more efficient and less
expensive.
, ©Themoon EXAM SOLUTIONS
22/11/2024 11:25AM
Economies of scale - as the demand for batteries has increased, the scale of production has also
increased. This has led to economies of scale, which has helped to drive down the cost of
batteries.
2) Government incentives
Plug-in car grant - this grant provides a discount of up to £2500 on the purchase of a new EV.
Phased out in 2024.
The EV home charge scheme - this scheme provides a grant of up to £350 towards the cost of
installing an EV charger at home.
The VED (vehicle excise duty) exemption - EVs are exempt from VED, which is a tax on road
use.
Supply/demand - what is the impact on the EV market of... - Answers✓✓Falling cost of
batteries impact --> changing costs of production
Government incentives impact --> government subsidies
This has led to the price falling (P1-->P2)
Diagram:
Increase in supply (S1-->S2)
Increase in quantity (Q1-->Q2)
Decrease in price (P1-->P2)
22/11/2024 11:25AM
Edexcel A Level Business Paper 3 - UK Car
Market Solutions
Current trends in the UK car market - growth of EVs - Answers✓✓The number of EVs
registered in the UK has been growing rapidly in recent years.
Expected to continue to do so in the coming years.
In 2022, there were over 100,000 EVs registered in the UK, up from just over 30,000.
Contextualise: 860,000 passenger cars produced in 2022 (11.6% are EVs and 17.9% are
Hybrids).
Why has this growth of EVs occured? - Answers✓✓Key reason --> Price of buying/owning
EVs has fallen.
Society of Motor Manufacturers and Traders (SMMT) said the average price of an EV in the
UK fell by 10% in 2022.
Why has the price of an EV fallen? - Answers✓✓1) Falling cost of batteries
Advances in battery technology - battery technology has been improving rapidly in recent
years. This has led to the development of new battery materials that are more efficient and less
expensive.
, ©Themoon EXAM SOLUTIONS
22/11/2024 11:25AM
Economies of scale - as the demand for batteries has increased, the scale of production has also
increased. This has led to economies of scale, which has helped to drive down the cost of
batteries.
2) Government incentives
Plug-in car grant - this grant provides a discount of up to £2500 on the purchase of a new EV.
Phased out in 2024.
The EV home charge scheme - this scheme provides a grant of up to £350 towards the cost of
installing an EV charger at home.
The VED (vehicle excise duty) exemption - EVs are exempt from VED, which is a tax on road
use.
Supply/demand - what is the impact on the EV market of... - Answers✓✓Falling cost of
batteries impact --> changing costs of production
Government incentives impact --> government subsidies
This has led to the price falling (P1-->P2)
Diagram:
Increase in supply (S1-->S2)
Increase in quantity (Q1-->Q2)
Decrease in price (P1-->P2)
