1. Alternative Fuel Vehicles

2. Contents : Market Environment Environmental Factors Consumer Attitudes

3. Eco-friendly behaviours % who claim to have done the following in the last 12 months “Which, if any, of the following have you done in the last 12 months…?” While eco-friendly behaviours were increasing, they have declined since 2009 most likely due to the economic circumstances Source: nVision Research Base: 1,000 face-to-face respondents aged 16+, GB

4. Frequency of using different modes of transport “How often do you personally use the following modes of transport...?” Source: Smart electric/The Future Foundation/nVision Base: 500 respondents aged 16+, UK, 2010

5. Market Environment

6. Issues in the Market • The market for Alternative Fuelled Vehicles (AFVs) has remained small for many years owing to; • cost • the lack of available models • low public acceptance of an AFV over a vehicle powered by petrol or diesel. • Sales of new AFVs accounted for only around 0.8% of total car sales in 2009 (15,000 units) • A number of factors are pushing AFVs forward as a viable alternative to petrol and diesel-powered cars. • A number of major manufacturers are set to launch new models into the UK market from 2011, boosting the limited number available to date. Tying in with its environmental commitments, the government has recently announced measures including financial incentives for buyers of AFVs, support to develop AFV infrastructure in parts of the UK, as well as tax breaks for AFVs and less polluting traditional vehicles. • Mintel predicts that sales of AFVs will take off in the next decade owing to the rising cost of driving petrol and diesel-powered vehicles. Models with better styling, greater driving range, versatility and cost may also help gain widespread acceptance amongst consumers, extending appeal beyond the current niche group of customers. • Mintel’s research suggests that a much broader customer base can be targeted as new models are launched, thereby bringing AFVs into the mass market at last. © 2011 Mintel International Group. All rights reserved. Confidential to Mintel.

7. Product Traffic Growth on Bing Microsoft Advertising Intelligence Tool • H2 2010 received 29% more traffic on hybrid vehicle related terms than during the same period in 2009 • While volumes are currently still low, this should continue to grow in the coming years as shown by the trendline

8. Alt Fuel Vehicle Demographics and Daily Trends: 79% more traffic occurs during the week, peaking between Monday and Wednesday Almost 30% more males searchers on Bing Microsoft Advertising Intelligence Tool

9. Strengths and Weaknesses Strengths • Rising cost of hydrocarbons. • Government incentives to switch to AFVs and low carbon vehicles. • Planned launch of a number of new models. • Recent popularity of small cars. • Benefits to consumers of the UK’s emergence from recession. Weaknesses • Undeveloped network of charging points. • Poor distribution network for alternative fuels. • Limited mileage range for EVs. • Choice of AFV models is limited. • AFV cost. © 2011 Mintel International Group. All rights reserved. Confidential to Mintel.

10. Best and Worst Case Forecasts UK best and worst case forecast sales of alternatively fuelled cars (AFVs), 2010-15 Source: SMMT/Mintel • Based on our consumer research indicating potential interest in owning an AFV, the expansion of the Plugged-In Places scheme, the launch of new models and government incentives, Mintel expects the market to grow from an estimated 23,000 vehicles 2010 to a total of 79,300 in 2015. • However, the best and worst case forecasts take volume sales potentially as high as 102,200 (best case) or as low as 56,300 (worst case) by 2015. © 2011 Mintel International Group. All rights reserved. Confidential to Mintel.

11. Consumer Attitudes

12. How often people drive % who drive a car Source: Eurobarometer/nVision Base: 1,000 respondents, aged 15+, UK, 2010

13. Attitudes toward electric cars % who agree strongly or agree with the following statements "Thinking specifically about electric cars now, please indicate how much you agree or disagree with each of the following statements" Source: Smart electric/The Future Foundation/nVision Base: 500 respondents aged 16+, UK, 2010

14. Benefits of electric cars % who agree with the following “Which of the following do you consider to be positive aspects of electric cars?” Source: Smart electric/The Future Foundation/nVision Base: 500 respondents aged 16+, UK, 2010

15. Summary The future for AFVs looks positive • Mintel believes the future for the AFV market is positive given the stimulus being offered by the government, the rising price of petrol and diesel at the pumps, and the plans by many major car manufacturers to roll out AFVs in the coming few years. • Improvements in what are seen as key barriers identified by consumers towards their use of AFVs, notably vehicle range as well as cost, are also set to be overcome. • Within the trade, there are expectations that sales of new AFVs will rise to 130,000 units in 2015 and 430,000 units in 2020 with the result that AFVs are likely to represent just under a fifth of total sales by the end of this coming decade. • Mintel, however, forecasts a slower rate of take-off for the market, with our expectations of sales standing at around 79,000, or at best, a level of 102,000 by 2015. Hybrids will drive the market and offer entry-level access to the AFV sector. © 2011 Mintel International Group. All rights reserved. Confidential to Mintel.