New EV sales won't reach potential without used market support, says Cox Automotive

Despite new electric vehicle (EV) registrations beginning to show a recovery, total EV sales may never reach full potential unless the used vehicle retail market gets to grips with alternative-fuelled vehicles.

That's the view of Cox Automotive, whose new car market forecast aligns with the current situation. Among the segments from April's year-to-date that saw the largest market share increases, were EV sales that included plug-in hybrids (PHEVs) and battery electric cars (BEVs). As Cox Automotive forecasted, the new car market bounced back last month, with 141,583 registrations, 18,752 (13.24%) of which were EVs.

However, Cox believes that more action must be taken to increase EV adoption in the UK and to ally some of the stumbling blocks affecting consumer purchasing. Regit recently polled drivers on the topic and found that 92% are concerned that the country's EV charging infrastructure is not up to today's demand, and 69% are sceptical that it will be able to cope with extra demand by 2030.

The key to allaying these fears and boosting EV adoption throughout the UK is the used market, where EV volumes and appetite are increasing as they become higher on the consumer choice list. Cox Automotive states that earlier EV models are increasingly reaching the used market. They are retaining high residual values, offering strong profit margins for dealers, and a more affordable, straightforward EV option for consumers. With more knowledge about used EVs and greater access to stock, the used market could become the proving ground that supports new EV sales.

Cox Automotive points to a recent consumer survey in partnership with Regit when explaining the criticality of the used market in the EV space. The survey shows apparent demand for EVs, with most motorists acknowledging that they will one day be driving electric, with one-quarter saying they will do so by 2025 and a further 45% by 2030. However, stumbling blocks remain, notably price (72%), range (66%), and charge times (61%).

April's market share of HEVs (hybrid-electric vehicles) grew to 8.3%, up from 1.1% on the previous year. PHEVs (plug-in hybrids) grew to 6.8%, up from 2.2% year-on-year, and BEVs (battery electric vehicles) saw a fall compared to April 2020 at 31.8%, with last month's market share falling to 6.5%. However, all three alternative fuelled vehicle types saw growth in year-to-date market share. HEVs 7.7%, up from 5.8% on the previous year, PHEVs 6.4% up from 2.8% last April and BEVs have grown to 7.2% compared to 4.0% this time last year.

The increases in new EV registrations come despite the reduction in support for EV buyers. In November 2020, the UK Government announced the ban of all new petrol and diesel cars from 2030 and the ban of new PHEV/HEVs from 2035. Then in March 2021, the government reduced funding for the 'Plug-in Car Grant' (PiGC). PHEVs and BEVs with a list price of below £35,000 are now eligible for a maximum grant of £2,500.

Philip Nothard, Cox Automotive's Insight & Strategy Director, explained that an increased focus on the used EV market is needed as it rapidly matures. This could hold the key to increasing consumer adoption of EVs alternative-fuelled vehicles, further boosting the new market. He said: "Used EVs are becoming available to buyers otherwise turned off by the expensive new vehicle list prices, high monthly finance payments, and mixed messaging surrounding brand-new models.

"Some earlier EV models have been on the road for a decade, so these are increasingly reaching the used market and benefit both dealers and customers alike. They retain high residual values, offer strong profit margins for dealers, and offer a more affordable, straightforward EV option for consumers."

Regit's latest EV consumer survey shows motorists are divided when it comes to whether or not they support the 2030 ban on the sale of new petrol and diesel vehicles, with 50.2% saying they're for the ban and 49.2% against. 

Nothard reiterated the role of the used market in making this happen. He said: "The UK needs to make its position on EV crystal clear for consumers and lean on the used market to help give motorists their first EV experiences, driving wider adoption across the country, which, in time, will undoubtedly be reflected in an improved position for new EV sales as the country continues to build its EV infrastructure. Perhaps a government grant for buyers of used EVs could positively impact EV adoption sooner and benefit the manufacturers of new ones." "Wholesale buyers can help by specifically seeking out EV stock and ensuring a reliable supply to consumers, promoting continuous EV uptake as well as reaping rewards commercially."