The price is…

The Government needs to go further to support sales of electric vehicles.

This has become a common mantra across the motor trade and from environmentalists.

Moreover, the public also demands more help to afford the green alternatives.

Cash strapped

According to new Auto Trader research, 87% of buyers aren’t willing to pay more for an electric car.

Petrol cars remain the most popular choice among car buyers for their next vehicle, according to independent research of over 2,000 drivers conducted in September.

Nearly two-thirds of buyers (65%) intend to spend a maximum of £20,000 on their next vehicle, a budget which puts a new electric car far out of reach.

Among these buyers, 47% are considering a petrol car, 38% are considering some form of hybrid, and just 8% an electric vehicle (EV).

Expensive reality

According to Auto Trader’s latest Road to 2035 Report, the median RRP of a new electric vehicle is £51,000.

This is 31% higher than for new petrol and diesel cars, and the report underlines the lack of affordable options for new EVs on the market.

There are just 16 for sale under £30,000.

Among the minority willing to spend more on an electric car, 70% are unwilling to pay over £3,000 extra.

Over 65s are the most reluctant to pay more, with just 6% of drivers willing to spend extra, although almost one in four 25–34-year-olds would pay extra to make the switch.

However, new EV sales remain low and are growing at a far slower rate, up 11% since January.

The online platform shows EVs accounting for 16.2% of new car leads in July, up 3.5% in a year, but still well below the 32% market share achieved when petrol prices rose to nearly £2 per litre in June 2022.

New EV prices remain prohibitively high despite five in six offering some sort of finance offer.

Second-hand

Used EV sales are relatively healthy.

According to the Road to 2035 Report, second-hand sales have increased 62% since January, with buyers tempted by lower prices.

The sales are strongest among 3-5 year-old EVs, which experienced the steepest price declines and reached price parity with petrol/ diesel counterparts of a similar age.

In August, the average price of a petrol 3-year-old BMW 3 Series was £ 24,110, compared to the £23,137 average price of a 3-year-old Tesla Model 3, which has fallen more than £22k compared to August 2022.

Out of pocket

Affordability issues mean new EV sales lag well below the Government’s Zero Emissions Vehicle mandate, which demands EVs account for 22% of new cars sold in 2024.

This is set to rise to 100% by 2035.

Manufacturers worldwide are also reassessing their timetables on electric vehicles following lower growth.

Consumers are showing increased interest in hybrids, with interest a third (33%) higher than 2023 in August.

However, the affordability issues remain even more acute for hybrids as no plug-in hybrid electric vehicles (PHEV) are on the market for under £30,000.

Similarly, the median RRP for a PHEV is approximately £8,000 higher than for an EV.^[10]

Help!

The report calls on the government to support new EV production to maintain a healthy and affordable used EV market and aid in mass adoption.

Requests on the new government include:

• creating incentives in the used car market so more people can financially afford an EV
• maintaining the existing salary sacrifice and BIK incentives to support the new electric car market and ensuring that new EVs do not fall foul of the VED’s expensive car supplement
• recommending that the VAT on public charging points is lowered to 5%.

This call comes as its survey reveals 70% of drivers opposed the ban on new petrol and diesel cars by 2035.

Meanwhile, the new Government has pledged to return to its original deadline of 2030.

The research shows that over 65s are the biggest opponents of the ban, although 25-34-year-olds are the most evenly divided, with 45% in support of it.

Tough choices

“The used EV market has shown real strength in the past 12 months – helped by signs of price parity with conventional diesel and petrol cars,” says Ian Plummer, Commercial Director of Auto Trader.

“But a healthy used market is unsustainable unless we do more to encourage drivers to buy new EVs, which are still too expensive. Most consumers say they are unwilling to pay more to go electric, which is a real concern for the transition. The rising interest in hybrids is encouraging as drivers look for reassurance, but they’re not going to solve the affordability challenge.”

“Labour has talked a lot about tough choices ahead of next month’s Budget. But if it is serious about the mass adoption of EVs, the Chancellor must not just protect the current tax incentives on offer but expand them to accelerate new and used EV demand to ensure it remains on track with government targets.”

Most viewed EVs on Auto Trader 1st- 8th September

New cars…

Used cars…