Will there be greater demand for used EVs?
It’s becoming much easier for dealers to predict the future appeal of EVs on their used forecourts and remaining unplugged from EVs might not be an option. The challenge for dealers is to carefully and gradually increase supply to meet rising demand from buyers looking for value for money. Here’s why…
The ban on petrol engines
The Government might be moving the goal posts when it comes to a ban on new internal combustion engine cars. Originally slated for 2040, we’re now hearing talk of 2035 and even 2030. For fleet buyers, the biggest purchasers of new EVs, 2030 is within three replacement cycles, so it will start to influence decisions made now.
EVs in the new buyer market
In the new market, EVs represent the fastest growing fuel type, up a massive 157% in the first eight months of this year; followed by Plug-In Hybrid Electric Vehicles (PHEVs) up 68%. Both at the expense of diesel and petrol, respectively down 60% and 45%.
The total volumes are still small, but the upward trajectory is established and accelerating. In August alone, one in 10 new cars registered was either an EV or PHEV.
EV charging stations
New EVs can average 200 miles on a single charge, removing range anxiety for many buyers. Once sparse recharging options are now experiencing huge growth, apparently unhindered by the COVID crisis, with over 34,000 charging points across the UK. Locations are becoming more imaginative with motorway services, supermarkets and petrol stations now joined by hotels, B&Bs and even a network of 900 Greene King pubs.
For the first time, it’s fair to say a recharge is within reach of most owners, most of the time.
EVs are holding their value
Research by insurer Direct Line found on average a used one-year-old EV only loses 12% of its value, compared to 24% for petrol cars. This and greater model availability from most manufacturers will in time increase the numbers appearing on used car forecourts.
The same research found on average an EV costs £52,133 over its lifetime, compared to £53,625 for a petrol fuelled model. We’re starting to see a tipping point.
The Green Agenda
The green agenda is undoubtedly becoming more of a factor in used car buying decisions. Zero VED is not to be sniffed at. And the rollout of clean air zones is a pressing consideration for buyers in urban areas.
Yet green isn’t the only agenda. Buyers are also now looking for alternatives to public transport due to Covid, some considering EVs for the first time. So too are families in the market for a second car as a run-around. Consequently, used EVs are starting to tick a lot of boxes.
Sourcing EVs
Growing new car sales means it’s becoming easier for dealers to source EVs. Volumes entering the wholesale market are steadily increasing, offering dealers an opportunity to start considering future proofing their stock mix.
“The wholesale market for EVs is still emerging, but volumes and appetite are increasing, as they become higher on the consumers choice list,” said Philip Nothard, Insight Director of Cox Automotive, owner of Manheim Auctions.
“The average age, mileage and price remain reasonably consistent when comparing 2020 with the same period in 2019. More importantly, the cap clean percentage performance and first-time conversions align with both petrol and diesel,” he added.
It’s still early days, but with newer generation EVs being traded as used cars, the technology is becoming available to buyers otherwise turned off by the expensive list prices and monthly finance payments of brand new models.