Latest analysis from the cap hpi POWER UPdate identifies a significant shift in size segment in January 2024, with a considerable decline in upper-medium vehicles, from 45% to 30% of all UK BEV sales, and an increase in smaller cars, from 20% to 30%.
Cap data shows that many dealers seem reluctant to stock EVs despite rising demand from consumers. If the ZEV mandate is to work effectively, every new car needs a used buyer later in life, and dealers have a role to play in building their local markets.
INDICATA white paper shows prices of used BEVs peaking in Q3 2022 where demand and the chip shortage weakened supply. But then prices fell as OEMs pushed discounted new and nearly new used BEVs into the market which coincided with rising volumes of two and three-year ex-PCP, leasing and salary sacrifice BEVs. This caused prices to crash by over 30%.
Report shows used BEVs now have a Market Days’ Supply (MDS) of 52 days which is behind petrol cars at 46 days and hybrids at 53 days. Market Days’ Supply is derived from dividing the currently available supply of inventory by the average daily retail sales rate over the past 45 days. The UK continues to have the lowest EV MDS in Europe, well ahead of the European average of 85 days.
Startline’s November Used Car Tracker also shows that 29% believe the move will mean the used electric vehicle (EV) market will take longer to develop while 19% forecast that consumer demand for EVs will fall. Additionally, 24% of dealers now believe it is more likely that motorists will buy a hybrid as a stepping stone to full electrification while 20% believe that EV prices will fall further in addition to recent reductions.
Just over a quarter of UK consumers drive less to avoid high fuel costs as a result of the cost of living crisis and 42% of UK would buy an EV because of the running cost advantages such as electricity being cheaper than diesel or petrol.
The Motor Ombudsman, the Ombudsman dedicated to the automotive sector, said this marks an 8% year-on-year increase in the volume of disputes logged by individuals. For customers who submitted a dispute about the purchase of an EV during 2022, 83% were in conjunction with a new car, with 17% stemming from used models.
Despite the evidence, it does not guarantee that BEV servicing prices will reduce dramatically as dealers look to raise SMR costs to retain their profitability. Dealers are starting to feel the pinch of reduced servicing revenues as drivers cover fewer miles which coincides with a rapid rise in operating costs, particularly technician salaries.
Despite the increase in the parc, major shortages of key components and supply chain disruptions across the globe caused new car registrations to remain broadly static at 1.65 million, with car ownership falling -0.2% to 35,023,652 vehicles – the second year in a row the car parc has fallen and the first time the UK has experienced consecutive falls in more than a century.
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