The UK’s Zero Emission Vehicle (ZEV) mandate has led to a reduction in the prices of new electric vehicles (EVs), with discounts being offered on three-quarters of new models.
This initiative aims to ensure that 22% of the UK vehicle registrations are electric to avoid heavy financial penalties for manufacturers.
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Auto Trader‘s Road to 2035 Report highlights the effects of the ZEV mandate, which was implemented despite the postponement of the sales ban to 2035.
The report indicates that 70% of new electric models are now advertised at lower average prices, as the automotive industry works to stimulate demand to meet the mandate’s requirements.
Although new electric car sales have risen, this growth is primarily attributed to the fleet and business sector.
Private car buyers seem less engaged, with EVs making up less than one in ten new cars sold to this group.
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By GlobalDataInterest peaked in June 2022, with EVs constituting 36% of advert views on Auto Trader but has since stabilised at around 14%.
Recent consumer research by Auto Trader from April shows a positive shift, with over a third (34%) of potential car buyers considering electric for their next purchase, up from 26% in August 2023.
The used car market, where two-thirds of UK drivers shop, is expected to experience the most significant impact from this increased interest in EVs, with advert views and enquiries for 0–5-year-old EVs reaching record highs.
However, affordability remains a significant obstacle to widespread adoption, with the used electric market experiencing 20 months of consecutive price declines.
Last year, only one in ten used electric cars sold for under £15,000, a stark contrast to seven in ten of all used car transactions.
The average price for a 0–5-year-old EV in April 2024 stood at £28,562, compared to £21,038 for petrol cars of the same age.
The marketplace analysis from Auto Trader underscores the scarcity of affordable used electric options, with only 10,000 EVs available for less than £15,000, against 350,000 petrol and diesel cars at this price point.
Additionally, there are only nine new electric cars with starting prices below £30,000, in contrast to 76 petrol and diesel models.
The Road to 2035 report also sheds light on the impact of negative perceptions surrounding electric cars.
Auto Trader said 72% of consumers are aware of the narrative that “electric cars catch fire”, with 44% believing it and stating it has made them less inclined to choose an electric vehicle.
Moreover, 70% have heard that “EVs are not cheaper to run,” with 33% believing this and indicating it has deterred them from purchasing an electric car.
Auto Trader commercial director Ian Plummer said: “A growing trend towards electric consideration is fantastic news but for this to be a fair and equitable transition – and, crucially, for expanding interest to convert into sales – we need to be sure that when those considerers are ready to buy, there are electric cars available in a variety of budgets.
“We need to make more progress on affordability to encourage retail demand, especially as exemptions from vehicle excise duty and the expensive car supplement for EVs end next year. Financial help from the government in the used electric market is vitally needed to ensure a fair and equitable transition.”
