“Tough times” lie ahead for the UK’s 2030 target to ban petrol and diesel cars, Auto Trader warns, saying “we are in danger of going off track”.
For Sarah Taaffe-Maguire, Business Journalist @taaffems
Thursday, April 20, 2023 05:58, United Kingdom
Interest in new electric vehicles may be waning, with data from the UK’s biggest car sales website suggesting Tesla boss Elon Musk is signaling further discounts to boost demand.
The volume of new electric car searches, ad views and messages to retailers on the Auto Trader platform fell by almost two-thirds (65%) from the start of last year to March this year, it reported.
Auto Trader has attributed this to the high cost of electric cars, higher borrowing rates and more expensive electricity, all between a cost of living crisis.
He released his findings at a time when Tesla boss Elon Musk is prioritizing price cuts over profits.
He signaled Thursday night after the release of the company’s latest quarterly results that there were further price cuts as Tesla moves to increase sales and market share in a tough economy.
Auto Trader called on the UK government to introduce tax incentives to improve affordability.
In January 2022, electric vehicles (EVs) accounted for 16.3% of new car ad views on the website, but by March 2023 they had fallen to 10.54%, Auto Trader said.
While 27% of all new car inquiries were related to electric vehicles in the first month of last year, that number dropped to 9% last month.
Disinterest may be growing as the company said new electric vehicles are 37% more expensive than petrol and diesel cars and there are now fewer new electric models in the £20,000-£30,000 range than in 2022.
The number of petrol and diesel models costing less than £30,000 is nine times greater than the number of electric vehicles, Auto Trader said, with a new electric SUV costing an average of £22,290 more than a petrol one.
The company’s analysis suggests that the savings drivers can make from using an electric car, as opposed to a diesel or petrol car, has shrunk as the cost of oil has fallen from highs after the invasion of Ukraine.
While EV owners with a home charger can save up to £130 per 1,000 miles by charging at off-peak overnight rates, the savings drop to just £40 for drivers using public chargers, says the analysis
Auto Trader noted that there was still strong interest in second-hand electric vehicles and fleet sales, where a company would buy cars for employee use or for lease.
Sales of electric vehicles have increased widely in recent years as have those of the government 2030 ban on the sale of new petrol and diesel cars approaches
The Society of Motor Manufacturers and Traders (SMMT) reported 76,233 sales of new battery electric cars in the first quarter of this year, up 18.8% on last year’s levels.
To boost interest and purchase of electric vehicles, Auto Trader called on the government to reduce VAT on used electric vehicles and said lenders should offer lower or no interest rates on vehicle finance deals electric
Adopting common standards on battery health and charging terminology should also be a top priority for government and industry, as Auto Trader said battery health is a top concern that buyers have when purchasing an electric vehicle.
“These are challenging times for the UK’s 2030 ambitions and we are in danger of drifting off course,” said Auto Trader’s chief commercial officer.
“If the government is serious about achieving its ambitions, it needs to do more. For example, it cannot be right that those who do not have the option of charging at home should be forced to pay substantially more for load their vehicles,” Ian. Plummer added.
“Although the extra £380m was announced in March to improve charging infrastructure will help, the goal of mass adoption is at risk unless we use the tax system inventively to stimulate electric vehicle purchases and accelerate demand.”
