Despite the ongoing upward trajectory in used electric vehicle demand, fewer than half of drivers are currently willing to embrace EVs as concerns over affordability and charging prevent consumers from making the switch, according to new Auto Trader research.
The latest Road to 2030 report from the UK’s largest online vehicle marketplace reveals the barriers to mass adoption as the 2030 deadline on the sale of new petrol and diesel vehicles approach. Its research, based on a poll of 4,000 drivers across the UK, reveals just 47% of drivers consider that owning an EV would fit in with their lifestyle.
The research, which comes ahead of World EV Day on 9th September, shows that 56% of drivers consider EVs too expensive, with 47% worried over a lack of charging points1. Despite the average household only needing to plug in once a week, two-fifths of drivers believe they would have to charge their cars every three days2.
The affordability barriers are underlined by the shrinking of new EVs on sale for less than £30,000, with just nine models now compared to 11 at the end of 2022. The handful of affordable new EVs contrasts with 87 diesel and petrol models on sale below £30,000. New EVs are still on average 33% more expensive than traditionally fueled vehicles, throwing up further barriers to mass market adoption.
Auto Trader’s report reveals a circa 23% contraction in second-hand electric prices over the past 12 months, bringing greener options within reach of more drivers. According to Auto Trader data, more than a quarter of all used EVs were priced under £20,000 in August – up from 7% a year earlier. EVs between three and five years old have seen even bigger price drops of 40%, making some EV models such as the Nissan Leaf cheaper than petrol or diesel equivalents for the first time.
As a result of the softening in prices, which has been fuelled by a significant growth in supply as brand-new EVs bought on finance or leasing contracts three-four years ago re-enter the market, demand for second-hand EVs on Auto Trader has increased significantly, with current levels up 68.6%[1] compared with August last year. What’s more, used electric cars are currently taking just 28 days to leave retailers’ forecourts, which is faster than both the market average (30) and their petrol-powered counterparts (30).
But while the oversupply of EVs has been effective in driving down used prices and encouraging consumers to consider the switch, uptake is still limited to wealthier drivers as concerns over affordability and charging hold back the push towards mass adoption. Auto Trader is calling for the Government to make EVs more affordable by using incentives in the tax system rather than relying on unsustainable market dynamics.
EV drivers with access to home charging can typically save £142 per 1000 miles compared to just £41 per 1000 for those relying on more expensive public charging points, on which VAT is also charged at the full 20% rate. Auto Trader is calling for equal VAT treatment for public and private charging points, and the use of incentives such as VAT cuts on the sale of used EVs, as well as cheaper financing deals for new models, to extend adoption beyond wealthier income groups with access to home charging. The company is also pressing for improved information on battery health to bolster both consumer and retailer confidence in used models.
Ian Plummer, commercial director at Auto Trader, said: “There is still much more work to be done to achieve a mass transition to electric vehicles before the 2030 ban on new petrol and diesel models and ensure no driver is left behind. Support from the tax system to put the used EV market on a more robust footing is vital for the sustainability of the entire EV market and our chances of successfully transitioning to EVs by 2030.
“Consumers are still worried about affordability and charging, which is why we need a clear statement of intent from the Government. Penalising drivers who have to charge in public with higher VAT is simply unfair: we need to end this charging injustice.”
Auto Trader set to launch ‘invaluable resource’ to help identify EV profit potential
Whilst the rate of used EV stock entering the market continues to outweigh the otherwise very robust levels of consumer appetite, there are signs the imbalance is beginning to level off. Indeed, supply has fallen dramatically over the course of 2023, with the volume of used electric cars advertised on Auto Trader daily, dropping from a peak of 18,000 in February, to just 12,000 at the start of September. Over the same period, demand growth on Auto Trader has increased from 47% YoY to nearly 70% YoY. This is helping to stabilise values, and with it provide strong profit potential for those retailers using data to buy and sell them at the right price.
To enable retailers to keep track of the electric vehicle market, Auto Trader is set to launch a new industry EV Hub, which will be made available from 8th September. It will include the latest used EV retail pricing data and speed of sale, as well as new and used levels of EV supply and demand. What’s more, the hub will provide retailers with the latest EV related insights and resources, ranging from dedicated webinars and guest interviews with industry experts, to step-by-step selling and stocking guides. This includes Auto Trader’s extensive Retailer Performance Masterclasses (RPM) modules.
Plummer added: “The electric market is still an immature one, which means it’s not only prone to volatility and nuance but can also be challenging to navigate. And with the continuing defleeting of circa 750,000 EVs sold over the last three years, as well as the ongoing push from manufacturers to achieve their ZEV mandates, the market’s only set to increase. By providing a selection of our high-level data and insights, we hope the Hub will serve as an invaluable resource to help keep track of and respond to changes in the market, and critically, to identify the very strong pockets of profit potential as used EV demand continues its upward trajectory and prices stabilise.”
The EV Hub can be accessed for free here https://www.autotraderinsight-blog.co.uk/ev-hub from the 8th September.
*Article Source www.newspress.co.uk
