Leading electric vehicle (EV) companies have issued a “warning” to the UK Government stating that a lack of support for the used EV market could undermine the country’s transition to zero-emission transport.
In a letter addressed to Transport, Environmental Audit and Business Select Committees, over 25 organisations emphasised the need for measures to improve access to battery electric vehicles (BEVs) for households and small businesses, and to address falling residual values affecting market confidence.
Go deeper with GlobalData
Coordinated by the British Vehicle Rental and Leasing Association (BVRLA), the initiative includes signatories from the Association of Fleet Professionals (AFP), vehicle rental and leasing companies, trade bodies, and fleet operators.
The signatories represent a broad spectrum of vehicle demand, including private and business customers, and extend to the insurance, remarketing, and servicing sectors.
Despite the growth in new battery-electric vehicle (BEV) registrations, driven by the fleet and leasing sectors and the government’s Zero Emission Vehicle (ZEV) Mandate, the new market, with approximately two million annual registrations, is significantly smaller than the used market, which sees seven million transactions annually.
However, the AFP stated that current support measures are narrowly focused on new registrations, despite the ZEV Mandate’s goal to increase the share of zero-emission vehicles sold each year.
Most UK consumers purchase vehicles from the used market, which lacks any support for transitioning to BEVs. The absence of targeted support is contributing to a growing imbalance between supply and demand.
Used BEV supply is projected to rise by 178% by 2028, yet prices have already dropped 50% over the past two years and are forecast to fall a further 28% by 2030.
The letter to the Select Committees warns that expecting the industry to absorb this impact indefinitely is “unsustainable”, potentially leading to more expensive new vehicles or limited supply.
Without policy changes, the UK risks missing out on 290,000 new EV registrations over the next two years, potentially jeopardising government decarbonisation targets.
The letter calls for engagement with policymakers to establish measures such as targeted grants, protections against residual value volatility, and standardised battery health information.
BVRLA chief executive Toby Poston said: “The used car market is nearly four times the size of the new one. Maintaining healthy demand and values for second-hand electric vehicles is essential if we want to deliver a sustained transition.
“A lack of government incentives or affordable public charging infrastructure means that too few used car buyers or dealers are seeing the benefit of going electric. As a result, used BEV supply is outstripping demand and prices are continuing to fall. This depreciation is costing fleets hundreds of millions and being passed on to new buyers in the form of higher motor finance costs.
“To restore confidence in the net zero transition and sustain a healthy electric vehicle ecosystem, the government needs to intervene.”
