Used electric cars and vans are expected to fall further in value in coming months, according one industry expert.
The slippage might also see petrol and diesel models cut back by manufacturers to meet tightening ev sales targets by Government.
Interference in the ICE market will have the effect of driving up values of existing models as a consequence.
Used electric vehicle values could fall by a further 5-10% in the next few months, the latest Vehicle Remarketing Association member meeting was told.
Giving a presentation on market trends for different fuel types, Dean Bowkett of Bowkett Consulting said there continued to be an imbalance between used EV supply and demand, despite recent dramatic falls in value.
“The one unbreakable rule of the used car sector is that you can’t buck supply and demand, and consumer interest in EVs remains muted against a backdrop of rising supply. We could soon be in a situation where for mainstream cars that are available with both petrol and electric drivetrains, the latter is marginally cheaper.” | A new survey has revealed Gen Z are driving the most EVs in the UK, whilst just three in 50 people aged over 65 drive electric cars. The team at DriveElectric surveyed 2,001 drivers in the UK and found 30% of drivers 18-24 had access to an electric car but 76% of 25 to 34 year olds have petrol cars. |
The meeting also heard from Alastair Cassels of MHA on the three key issues facing motor manufacturers during the immediate future – the forthcoming zero emissions vehicle (ZEV) mandate, distribution costs and competition from new entrants.
“Government consultation on the ZEV mandate closes this week and, if it goes ahead as planned, could have huge implications for manufacturers selling cars in the UK, including some of the biggest mainstream names.
“It is possible that for those who don’t meet the mandate’s targets, fines of £15,000 per vehicle could be imposed, which is a dramatic figure.
“Car makers who don’t have sufficient EV representation in their ranges will be in very difficult positions and may have to do everything from buy credits from other manufacturers to strangling supply of petrol and diesel vehicles to balance their sales.”
Rupert Pontin, vice chair at the VRA, added,“The future of EVs in the used car market is very much a live debate within our organisation.
“Indeed, there are those who believe that supply and demand are now balanced and can point to rising values for some models that appear to be underpriced. However, others believe that further falls in value will happen, and given the swingeing reductions seen over the last year, there is an extreme degree of caution in the market.
“We are very much aware of the role that the remarketing sector needs to play in terms of the process of electrification and, as an organisation, we, of course, back the move to EVs in environmental terms. However, as pointed out at the meeting, fighting the forces of supply and demand is tremendously difficult, and vehicle values are very much a dynamic outcome of those factors.”
Legacy petrol and diesel vehicles that might need to be operated well beyond 2030 could mean fleets have to learn a new range of service, maintenance and repair management skills, says FleetCheck.
Peter Golding, managing director at the fleet software specialist, said it appeared fleets would potentially need to carry on operating some units, especially some specialist light commercial vehicles, for which there were no obvious electric replacements.
“There are fleet operational roles for which it appears there will be few viable electric vehicle (EV) replacements in the medium and potentially even the longer term. These could include everything from cars, vans and 4x4s used for towing long distances to anything that uses a diesel generator to power heavy equipment.
“Unless there is a step change in technology, any available electric alternates for these are likely to be limited in operational terms while no new internal combustion engine (ICE) options will be available because production will have ended. Fleets could be left in a position where legacy ICE vehicles might be operated for much longer than is now the case.”