Drop in demand for new electric cars puts green transition at risk, report warns
Image credit: Foto 139966991 © Suwin Puengsamrong | Dreamstime.com
The UK is in danger of "veering off-track" from the target of banning petrol cars by 2030, as the demand for new electric vehicles (EV) slumps, according to a new report.
The volume of new electric car searches, ad views and messages to retailers on the Auto Trader platform has dropped by almost two-thirds (65 per cent) between March 2022 and 2023, the company has reported.
Electric vehicles (EVs) then made up 16.3 per cent of new car ad views on the website, but by March 2023 the figure had fallen to 10.54 per cent, Auto Trader said.
Auto Trader's Road to 2030 has attributed this to the high cost of EVs, which were found to be, on average, 37 per cent more expensive than petrol and diesel cars. Moreover, other factors such as high interest rates and an increase in the cost of electricity also played a role.
The company stressed that these high costs are hampering the uptake of EVs, with the number of models priced between £20,000 and £30,000 significantly decreasing in the last year.
Overall, the number of petrol and diesel models costing less than £30,000 is nine times bigger than the number of EVs, Auto Trader said, with a new electric SUV costing an average of £22,290 more than a petrol model.
"These are difficult times for the UK's road to 2030 ambitions and we are in danger of veering off-track," said Ian Plummer, Auto Trader's commercial director.
"If the government is serious about achieving its ambitions, it needs to do more. For example, it cannot be right that those who don't have the option of charging at home are forced to pay substantially more to charge their vehicles."
The company urged the government to offer better incentives for making the switch from conventionally-fuelled cars, such as a reduction on VAT for public charging so it is the same rate as home charging.
Currently, VAT on domestic electricity is 5 per cent whereas motorists using on-street chargers pay 20 per cent. As a result, while EV owners with a home charger can save up to £130 for every 1,000 miles by charging at off-peak overnight rates, savings reduce to just £40 for those drivers using public chargers, the analysis says.
Overall, EV sales have broadly increased in recent years as the government's 2030 ban on the sale of new petrol and diesel cars approaches. The Society of Motor Manufacturers and Traders (SMMT) reported 76,233 new battery-electric car sales in the first quarter of this year, up 18.8 per cent on last year's levels. However, Auto Trader has warned that the rate of uptake is at risk of falling due to a decrease in consumer interest.
The release of these figures follows Elon Musk's announcement that he would reduce the prices of Tesla vehicles in a bid to increase sales.
"While the extra £380m 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 spur on EV purchases and accelerate demand," Plummer said.
A government spokesperson said: “Electric vehicles continue to offer opportunities for savings through cheaper charging and maintenance costs, and we have put £2bn into helping people make the switch.
“Recent industry figures showed continued growth in new electric car registrations, and more EVs are entering the used car market – giving people more choice for accessing affordable EVs.”
The UK plans to ban the sale of new petrol and diesel cars by 2030, but MPs have warned that the government faces a “huge challenge” to make this happen on time.
There are currently fewer than 39,000 public charge points in the whole of the UK. A study from 2021 found that the installation of chargers needs to increase by five times the current rate if the plan to phase out petrol and diesel vehicles by 2030 is to be achieved.
Sign up to the E&T News e-mail to get great stories like this delivered to your inbox every day.