- Auto Trader’s new “The Road to 2035” report is now live, sharing insights on the UK’s electric vehicle uptake.
- Despite government incentives, private new EV sales slow, but used EVs are in demand.
- The high demand for affordable used EVs is potentially impacting the residual value of petrol and diesel cars.
- Reducing upfront costs and addressing concerns about battery life and charging infrastructure are crucial for wider EV adoption.
Examining the key findings of Auto Trader’s recent analysis of UK electric vehicle uptake.
In the transition towards a more sustainable future, electric vehicles (EVs) play a pivotal role in reshaping the automotive industry. The latest edition of Auto Trader’s The Road to 2035 provides valuable insights into the current landscape of EV adoption in the UK and outlines key strategies to drive mass adoption leading up to the ban on new petrol and diesel cars in 2035.
Ian Plummer, Auto Trader’s Commercial Director, shares his thoughts:
“The regulatory pressure is really amping up now as we’re almost halfway through the first year of the Zero Emission Vehicle (ZEV) Mandate but unfortunately, private new electric car sales are stalling.
In the previous edition of the report, we forecasted that manufacturers would use price competitiveness as a key lever to meet the mandate and now share some key examples where this has worked. Another tactic that’s becoming apparent in the data is a return to pre-registering. Spurred on both by a return to the pre-covid push market and the ZEV Mandate, the volume of pre-registered stock is growing quickly and electric vehicles make up a disproportionate amount of these cars.
But there’s good news from the used electric market where demand is strong in segments where the price is right. At many points we’re seeing demand outweigh supply as we’re reminded the second-hand electric market is still growing from a volume point of view.”
Current progress and challenges
The report reveals that while progress in the new EV market has remained relatively stable, with 15.7% of new car sales being electric in the first four months of the year, there are notable challenges hindering widespread adoption.
Private sales of new EVs have declined year-on-year, partially offsetting the advancements made by fleet operators benefiting from government incentives.
Decreasing price in new EVs to reach ZEV mandate
One significant trend highlighted in the report is the changing pricing dynamics in the EV market. Fresh analysis from the UK’s largest automotive marketplace reveals that three-quarters of new EVs are currently being advertised with a discount. This means that average prices are falling for seven in 10 new electric models as the industry strives to generate enough demand to meet the ZEV mandate – regulation that requires manufacturers to ensure 22% of their UK vehicle registrations are electric or they face heavy financial penalties.
In terms of second-hand EVs, the market is booming, with a 66% year-on-year increase. This is due to the growing choice in the used EV market, and the fact that price parity has been achieved on most 2+ year old EV models. The report also suggests that the decreasing price of used EVs may impact the residual value of petrol and diesel cars in the future.
Addressing affordability and consumer concerns
To unlock the early majority of buyers and accelerate EV adoption, addressing affordability on new EVs remains a critical priority.
Although there are more discounts being offered for new EVs, it’s not quite enough. It’s clear that achieving price parity with new internal combustion engine vehicles will increase demand, as we have seen in the used EV market. Moreover, consumer concerns around battery longevity, supposed electric car fires, and charging infrastructure need to be effectively addressed to build confidence and drive widespread adoption.
Strategies for accelerating adoption
The report outlines several key strategies to accelerate EV adoption in the UK:
- Financial Incentives: Implementing policies like extending purchase grants or offering tax breaks on EVs would make them more affordable for a wider range of consumers. This could significantly impact the early majority segment, who are often more price-sensitive than early adopters.
- Charging Infrastructure: Aligning private and public charging costs to attract individuals without home charging options.
- Battery Confidence: Establishing standardised testing protocols to assure consumers of battery reliability and longevity.
- Soft Incentives: Introducing creative incentives such as parking perks and free charging to encourage EV uptake.
Collaborative efforts for mass EV adoption
As the automotive industry navigates towards the 2035 deadline, collaborative efforts between industry stakeholders and policymakers are essential to counter misinformation, address consumer concerns, and drive EV adoption among the early majority. By prioritising affordability, battery health, and innovative incentives, the industry can pave the way for a sustainable and electrified future on the roads of the UK.
Erin Baker, Auto Trader’s Editorial Director, comments on the findings from the report:
“Whilst industry reactions to the ZEV Mandate have been mixed, looking at the slumped rate of growth in the second-hand electric market, it’s clear that the 2035 deadline announcement has dented consumer appetite for electric cars. And, as we’ve just shared, with an increase in the noise of misinformation surrounding EVs, it’s more vital than ever that we as an industry collaborate to address consumer concerns. While we know the data rebuts the common myths, we must be persistent and empathetic in countering these narratives and battery health has to be a priority. We therefore need to redouble efforts to engage the early majority.”
In conclusion, the journey towards mass EV adoption demands coordinated actions, consumer-centric approaches, and a commitment to overcoming barriers to entry. By aligning incentives, addressing consumer needs, and fostering industry collaboration, the UK can accelerate its transition towards a greener and more sustainable transportation ecosystem by 2035. This positive shift is already gaining momentum, with Auto Trader’s April 2024 research showing a significant rise in consumer interest – over a third (34%) are now considering EVs for their next car, compared to 26% in August 2023. It’s time to harness this growing enthusiasm and turn it into a reality.
