New car trends drive record used EV sales
SMMT’s latest used car market data is a welcome indicator that Britain’s EV transition is moving in the right direction – even if not as rapidly as hoped. All-electric models accounted for more than one in 18 transactions between April and June, up from one in 30 the year before and helping drive the overall market past two million units for the first time in half a decade. Given the used market is where most motorists buy their next car, continued growth is what we all want – but it depends on a functioning, healthy new car market and, in terms of EV demand, a robust ecosystem.
We cannot lose sight of the fact that almost nine in 10 used sales were either petrol or diesel in Q2 – a reflection of the parc but also significant volume demand, underlining the challenge of getting every motorist to go electric. Fundamental to that transition is a new car market flourishing on the back of product investment and new model rollout, and it is for that very reason that industry has welcomed government’s announcement to review the ZEV Mandate.
The regulation has always sought to compel the supply and therefore sale of new EVs at ever increasing proportions – and industry is constantly striving to improve that supply with lower running costs, a better driver experience and advanced technology. But the mandate drives market share, not volume, and it is volumes and margin that industry needs to be profitable – to underpin future investment, model innovation and rollout. It is also volume, not share, that will determine growth in the wider EV ecosystem and infrastructure. Given the mandate cannot dictate actual demand and volume, it perversely risks doing the opposite over the long term – diverting billions of pounds of investment into discounts today, and harming industry’s capability for EV reinvestment, production and model provision tomorrow.
Pushing new EV supply further and further ahead of underlying demand (with repeated surveys, by Autotrader, Deloitte and others putting that demand at around 10% to 13%, far behind the mandated 33% this year, 38% next year and 52% the year after) also risks a pipeline of used EVs into the second-hand market that, because of initial discounting and support, destroys residual values, causes instability and undermines confidence.
We need EV choice that is accessible and affordable for everyone, so supply must be delivered at a sustainable pace that doesn’t undermine the total cost of new EV ownership – and without damaging industry’s ability to deliver the very choice which motorists expect. With government’s consultation now underway, industry will continue to work with government and stakeholders to make the case for change in how, not when, road transport decarbonisation is delivered.