Boosting the Second-Hand Electric Vehicle Market: Increasing Affordability and Reach
The demand for more affordable zero and low-emission cars is on the rise, as indicated by the 80% increase in sales of second-hand electric vehicles (EV) in the three months leading up to June. During this period, over 30,500 battery-powered vehicles were sold, marking an 81.8% rise compared to the same period last year. However, despite this growth, second-hand EV sales only accounted for 1.7% of the total second-hand market. This highlights the need for further development in the UK’s vehicle fleet before the ban on new internal combustion engine (ICE) vehicles in 2030.
The used market is also witnessing a surge in the popularity of low-emission plug-in and hybrid vehicles, with sales increasing by 11% and 30% respectively, according to data from the Society of Motor Manufacturers and Traders (SMMT). Despite the growth in electric car sales, petrol and diesel vehicles still dominate the market, accounting for almost 95% of the 1.8 million used vehicles sold in the quarter.
Boosting the second-hand market is crucial to increasing the reach and affordability of electric vehicles, which are currently more expensive than ICE models. However, second-hand EV prices have been decreasing over the past year, with data company Cap hpi estimating a 35% fall in prices within a 12-month period.
The electric vehicle market has experienced rapid expansion in recent years, with over 260,000 new electric cars registered in 2022, compared to just 15,000 in 2018. Despite this growth, concerns regarding price, vehicle range, and the resilience of the charging network and power grid remain.
The ban on new petrol and diesel cars was initially announced by former Prime Minister Theresa May in 2017, with a deadline set for 2040. However, current Prime Minister Boris Johnson brought the ban forward by a decade to 2030. The government has also provided significant funding to support vehicle battery production, including investments in Nissan’s Sunderland plant and a gigafactory in Bridgwater, Somerset, owned by Jaguar Land Rover’s parent company, Tata.
Recently, the issue has gained political traction, with Conservative MPs expressing concerns about the cost to consumers. This has been supported by newspaper campaigns in the Sun and Daily Mail, advocating for a delay in the ban. Despite this, Downing Street has affirmed the Prime Minister’s commitment to the 2030 ban, despite a cooling on Net Zero policies following opposition to the expansion of London’s Ultra Low Emission Zone.
The Ultra Low Emission Zone scheme exempts owners of low-emission vehicles, including certain petrol and diesel models, from a daily charge for driving in greater London. The scheme’s expansion, initially proposed by Boris Johnson, played a role in limiting the swing to Labour in a recent by-election, enabling the Conservative candidate to win by a margin of fewer than 500 votes.
Mike Hawes, the chief executive of the SMMT, emphasized the importance of a buoyant new car market and accessible, reliable charging infrastructure powered by affordable, green energy in meeting the growing demand for pre-owned EVs. This will enable more people to drive zero-emission vehicles at a price point that suits them, ultimately accelerating the achievement of environmental goals.