The move to an electric future is in danger of stalling according to a new survey.

Consumer confidence in electric cars has dropped significantly from two years ago. This latest survey as found that only 9% of car owners say their next car will be electric.

Bringing it home

Rather than private buying, it is fleet sales that are buoying up (EV) sales, achieving a 20% market share in August.

In the first half of 2023, less than a quarter of new EVs were sold to private buyers. This in turn leads to supply outweighing demand in the used market. A knock on effect is much lower residual values for second hand motors.

A joint study by Electrifying.com and The AA found that just 16% of people agree that the Government is right to pursue the 2030 deadline for banning the sale of new petrol cars.

Surging prices for new EVs is one issue that is hampering sales. The survey found that 87% of buyers believe EVs are just “too expensive”.

Slowing progress

Edmund King OBE, AA president, believes there are plenty of headwinds slowing the move to EVs, and is calling for more state support.

“There is no doubt that the higher initial cost of EVs and charging difficulties… are putting off a significant proportion of drivers from being able to make the switch.

“Financial incentives are needed to help ‘level up’ the affordability,” state King. But he believes that most people will not turn back once they have experienced the electric alternative.

“Once drivers are able to go electric they will enjoy the financial, driving and environmental benefits and will not look back.”

Price of change

Auto Trader data shows new EVs are, on average, 33% more expensive than traditionally fuelled vehicles.

At the same time, there has been a 23% contraction in second-hand electric prices over the past 12 months. Supply and demand in the market place is lowering prices of used cars, if not new ones. This brings the greener options within reach of more drivers with Auto Trader data revealing more than a quarter of all used EVs were priced under £20,000 in August, compared to 7% last year.

EVs between three and five years old have seen even bigger price drops of 40%.  Models such as the Nissan Leaf can now turn out to be cheaper than petrol or diesel equivalents for the first time.

Too many and not enough

Much of this stems from the increasing supply and model choice of EV. An oversupply of EVs has been effective in driving down used prices, though consumers are still reticent about switching. As China takes a much greater slice of the new EV market, new prices are set to be pushed down further in what is becoming a highly competitive market place.

In its latest Outlook Report, the BVRLA believes that the supply-demand seesaw is at risk of tipping sharply.  This will lead to “major volumes of used BEVs hit[ting] the market, unless authorities and the fleet industry can stimulate greater demand.”

The report highlighted that new EV entrants are starting to offer models with cheaper prices and longer ranges. IN turn it will further squeeze prices in the second-hand market.

Help is needed

Auto Trader is calling for the Government to make new EVs more affordable by using incentives in the tax system, rather than relying on unsustainable market dynamics.

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,” he states.  “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”.

“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.”

Lacking confidence and cash

Research from Turo found that 43% of Brits say they won’t consider switching to an EV when they purchase their next vehicle.

Among older generations, this figure rose to 53% among Gen X and Baby Boomers, but dropped to 25% of Gen Z and Millennials.