- The UK’s British Vehicle Rental and Leasing Association (BVRLA) has called on the government to bring in more incentives and tax grants to support the UK’s used EV market in particular, in order for the government to meet current decarbonisation targets.
- Whilst the used EV market currently offers some significant deals compared to new electric cars, this market is at risk of drying up in the next few years.
- The devaluation of used EVs is currently being absorbed by new buyers and lease companies, which the trade body has called unsustainable.
The UK’s used EV market needs support, despite attractive prices
Used EVs in the UK have gotten increasingly cheap over the last few months, even dropping below the prices of their used ICE-powered counterparts – making them an attractive deal for not only those on the used market, but for those who would otherwise purchase a new EV. Without any intervention, that offer is set to get even cheaper, with the BVRLA noting an Oxford Economics model that indicates used electric car prices prices will fall a further 28% in the run up to 2030, while that figure stands at 12% for electric vans.
However, this massive price disparity carries the risk of potential new EV buyers and lease companies losing confidence in EVs, with the trade body noting that lease rates on EVs are already on the up, as a result of this. Additionally, these drops also risk eventually reducing activity on the used EV market, if prices will continue to drop heavily after purchase.
Because of these issues, the BVRLA has called on the government to implement several used EV-focussed incentives. This includes a national EV information campaign, which could boost both new and used EV sales. It has also called for mandatory battery health certificates on used EV sales, which was mentioned in Labour’s earlier manifesto. Some used car dealers which specialise in EVs, such as Drive Green, have already been seen to provide these. The body also called for the implementation of a used EV grant, for VAT to be cut on used EVs by 50% for four years, the addition of a 0% benefit-in-kind tax rate on used EVs for four years, and for the civil service to also be allowed to access used EV sal-sac schemes.
BVRLA Chief Executive, Gerry Keaney, commented:
“The crisis we are seeing in the used EV market is a direct threat to the Government’s ambitious ZEV Mandate and ICE Phase Out targets. New EVs are expensive while used EVs are stunningly cheap and getting cheaper, but someone needs to pay for this price gap. It is motor finance companies and new EV drivers that are footing the bill, through massive depreciation and increased lease rates. These are the fleets and customers that have been responsible for driving demand for EVs up to now. We cannot afford for them to lose confidence in the transition.”
