Companies responsible for new electric vehicle (EV) registrations have warned the UK Government that a failure to support the used market “will stop the zero-emission transition in its tracks”.
Coordinated by the BVRLA, and signed by fleet operators, vehicle rental and leasing companies, and trade bodies, the letter has been sent to the Transport, Environmental Audit, and Business Select Committees, calling for measures that support household and SME access to EVs, and mitigate “the volatile residual values denting market confidence”, it said.
It also calls for support on behalf of the full EV ecosystem, with signatories representing vehicle demand across private and business customers, encompassing insurance, remarketing, and servicing too.
Registrations of new battery electric vehicles (BEVs) are on an upward trajectory, led by the fleet and leasing sectors and pushed by the Government’s Zero Emission Vehicle (ZEV) Mandate.
The size of the new market, which is around 2 million vehicles, is considerably smaller than the used market of 7 million annually.
But current support measures focus on new registrations, and the terms of the Mandate increase the proportion of new car and van sales that are for zero-emission vehicles each year, with all those vehicles set to reach the used market in the months and years ahead.
The majority of UK consumers only buy on the used market, and currently have no support to make the shift to BEVs, creating a chasm between supply, due to increase by 178% by 2028, and demand.
Without intervention, forecasts suggest the UK could lose out on 290,000 new EV registrations in the next two years. Such an outcome would be at odds with the ambitious decarbonisation targets set by government and prevent progress from accelerating.
Solutions suggested by industry include targeted grants, measures to mitigate the volatility that residual values are experiencing, and the introduction of clear 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 in 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.”
