Guest editor: Catherine Faiers, COO, Auto Trader
This year we’ve seen new players enter the market and soaring demand for used electric cars thanks to price declines, but we’ve also seen an extension to the date for the ban on the sale of new petrol and diesel cars, and almost daily confusing and negative media headlines surrounding electric cars– so it’s been quite a year! As guest editor, I explore how these trends might continue in to 2024 and why empathy could be the key to unlocking mass electric adoption.
The rise of the new entrants
We’ve heard a lot about new entrants to the UK electric car market, and the threat they pose to the status quo – but 2023 was the year that their presence has truly begun to be felt. The UK car market is naturally more open to these newcomers as, without the domestic giants that dominate in France and Germany, market share is distributed more evenly between manufacturers and UK consumers are notoriously less loyal. Right now, consumer behaviour on Auto Trader shows us that interest in new brands is high, and though there’s a drop off when it comes to conversion, with strategic partnerships in place with well-known retailers and more brand exposure in time, this won’t be a problem for long – especially where they lead on price.
This year we’ve seen that the transition is proving difficult for incumbent brands – which have already lost market share – as seen in the shakeup of the top ten bestselling brands by fuel type, where Tesla dominates electric car sales. Although many won’t consider Tesla a new entrant, they only arrived in 2018 and now deliver 3% of new car sales in Britain. For consumers, this all means they will have more choice to navigate than ever before across new brands and models – with circa 20% rise in the number of models available since 2019 – and we must consider how confusing this will be.
Supply is starting to scale
As electric stock volumes grow, with one million electric cars on the road, this year we’ve felt the full impact of supply and demand dynamics in a way that can only happen in a rapidly growing market.
The automotive retailing community won’t forget the electric 2023 price declines in a hurry but it’s vital that they don’t give up on electric cars, which will continue to dominate the future of the automotive industry for years to come. The whole market is watching supply, demand and pricing trends and it’s this data-driven approach which will be key to success in this new and rapidly evolving market. For consumers, this means having confidence in when to buy, and what to pay for, an electric car has never been more confusing and this is where an empathy-centred approach is crucial.
All change again in 2024
Next year we’ll see new market dynamics come to the fore as the Zero Emission Vehicle Mandate, which will require 22% of all new car sales to be electric, comes into force. The pressure of this mandate will see many manufacturers prioritising volume over value when it comes to sales, and we can expect to see even more discounts and reduced finance options as car brands pull the price lever in a bid to stimulate new electric car demand. This will mark a return to a push, rather than pull, market as the supply restraints of previous years begin to fade.
Consumers are confused.
While we’ve seen some great progress in various strands of the emobility sector, thanks to the persistent and determined hard work of our emobility colleagues, overall, electric vehicles have had a rough year when it comes to consumer perception. From long queues at chargers last Christmas to confusing media headlines throughout the year, topped off by the Government changing the goal posts whilst planting seeds of doubt – it’s not surprising that more consumers than ever before are saying they’ll never buy an electric car.
We need to work together, starting with the consumer
Next year, we’ll be focusing on driving clarity and building confidence in electric vehicles by placing consumers at the heart of our marketing and product development as well as segmenting our approach, enabling us to support those who are most ready to start their electric journey.
The old adage that ‘change is the only constant’ feels particularly pertinent as new entrants, new legislation, and new consumer challenges continue to reshape the landscape. Whatever 2024 brings, we look forward to Driving Change Together, Responsibly with our emobility colleagues.