Sales of second-hand EVs reach record high
Image credit: Getty Images
Sales of secondhand pure electric cars jumped by 44 per cent in the third quarter of 2022, despite a 12.2 per cent decline in overall used car sales, according to new figures.
Some 16,775 used pure battery electric cars were bought in the UK between July and September, as the market reached a record high, the Society of Motor Manufacturers and Traders (SMMT), has said.
The data increased electric vehicles' (EVs) market share from 3.3 per cent to 4 per cent, reflecting the rising trend in new EV sales. In comparison to 2021, sales of used hybrid electrics were up 2.5 per cent, but demand for plug-in hybrids fell by 5.8 per cent.
EVs now represent 14 per cent of the new car market, compared with 11.6 per cent at the end of 2021, the figures show.
“Electric vehicles are becoming the hottest ticket in town," said Alex Buttle, co-founder of used car marketplace Motorway.co.uk. “As more drivers make the leap, demand for used EVs will continue to soar.”
In contrast, the overall number of used cars bought between July and September was 1.8 million, marking the first time quarterly transactions dipped below two million since 2015.
This trend, however, was attributed to supply shortages, as production delays caused by supply chain problems and the global chip shortage have led drivers to hang on to their vehicles for longer than expected.
“Given the short supply of new cars due largely to sustained chip shortages, a declining used car market comes as little surprise, although it’s great to see a growing number of used buyers able to get into an electric car," said SMMT chief executive Mike Hawes.
"The demand is clearly there and to feed it we need a buoyant new car market, which means giving buyers confidence to invest."
James Fairclough, CEO of AA Cars, pointed to the "ironic" fact that the same factor holding back used car sales is also boosting second-hand vehicle purchases. In the first nine months of 2022, he said, 12.6 per cent fewer new cars rolled off UK production lines than did during the same period last year.
“The weakening economy is also taking its toll," he added. "As consumer confidence falls, double-digit inflation is eating into people’s disposable incomes and their willingness to buy big ticket items like a car.”
In addition to the soaring numbers of used electric car sales, 15 per cent of new car purchases were also said to be electric, as manufacturers increasingly focus on models that can lower their carbon footprint and provide higher margins.
However, recent analysis by E&T has revealed that the deployment of chargepoints across the nation is not keeping pace with the record growth in EVs on the road.
Faced with a lack of EV charging points in UK roads, the SMMT has called on the government to provide funding to adapt the country's infrastructure to the needs of EV drivers
“Next week’s autumn statement is an opportunity for the government to make a long-term fiscal commitment to zero-emission motoring, including adequate public charging infrastructure, which, especially given the economic headwinds, would go a long way to stimulating the market and delivering both economic and net-zero progress,” Hawes said.
Since the pandemic, the world has been suffering a global chip shortage that has affected many technological companies, and particularly car manufacturers.
Since the shortage began in 2020, the economic losses caused by the lack of semiconductors can be measured in billions of dollars.
Over the past two years, the chip shortage has forced Ford, Jaguar Land Rover, Volkswagen, General Motors, Nissan, Daimler, BMW, Renault and Toyota to shut factories, scale back production or exclude high-end features such as integrated satellite navigation systems, which rely on sophisticated semiconductor technology.
Earlier this year, Jaguar Land Rover and Nissan both reported ongoing problems sourcing the computer chips needed to manufacture their cars, with the former missing delivery targets as a result of the semiconductor shortage. Moreover, Nissan separately said that production for the year will be 7.5 per cent below its previous target of 3.7 million cars due to similar issues.
“In the second half of the fiscal year, the company expects to face continued shortages of semiconductor supply and increasing raw material prices,” Nissan said. "Despite these challenges, Nissan will continue to introduce new models and improve the quality of sales."
However, Jaguar Land Rover was able to compensate for the disruption with sales of pricier models rising by more than a third to £5.3bn.
Thierry Bolloré, Jaguar Land Rover’s chief executive, said: “Demand for our most profitable and desired vehicles remains strong and we expect to continue to improve our performance in the second half of the year, as new agreements with semiconductor partners take effect, enabling us to build and deliver more vehicles to our clients.”
Last month, the European Parliament approved a set of rules mandating that all new cars and vans registered in Europe will need to be zero-emission by 2035. The rules trail similar measures put in place by the UK, which announced in 2020 that a ban on new diesel and petrol cars would be instituted by 2030.
However, the cost of new EVs continues to be high. A report by consumer website Electrifying.com has found that there are only seven new electric car models on sale in the UK for under £30,000, compared to 107 available models of petrol or diesel cars in the same price bracket.
Earlier this year, US Commerce secretary Gina Raimondo warned that the global semiconductor crisis is expected to last through 2023 and perhaps longer as manufacturing still struggles to keep up with demand.
Sign up to the E&T News e-mail to get great stories like this delivered to your inbox every day.