Giving EVs a second wind
Toby Poston, director of current affairs, BVRLA, looks at the pre-owned electric vehicle market
Toby Poston, director of current affairs, BVRLA
For years we have seen electric vehicles trickling through to the used market. That trickle is now a fast-flowing stream and 2023 has seen a surge of EVs looking for their second owner.
This stream of used vehicles springs from the new market, where the accelerating popularity of EVs has been well publicised in recent years. Already this year, the BVRLA leasing fleet volume has surpassed pre-pandemic levels. That resurgence has been driven by uptake of new EVs through company car and salary sacrifice schemes.
As always, the new car market feeds the used one. The two coexist, each being reliant on the good health of the other.
That initial flow of EVs was well managed by the used market, buoyed by sufficient demand from early adopters actively wanting to make the switch. But as volumes increase, demand needs to follow. There is no use patting ourselves on the back for achieving the right 2030 Phase Out trajectory in new BEV sales, if we leave the used market trailing in our wake. There is a symbiotic relationship that needs careful nurturing.
With the current rates of new BEV registration, the used market will have no issues with EV supply. Instead, we need to focus on creating demand by highlighting the cost and performance benefits of going electric.
This is harder than it used to be. New BEV registrations are driven by tax benefits for company-provided vehicles, incentives that are not matched in the new retail or used markets. Soaring energy prices have narrowed the total cost of ownership (TCO) benefits of going electric to such an extent that it is no longer an inertia-destroying no-brainer of a decision. Meanwhile, EV-bashing seems to be the current topic of choice for national newspaper columnists.
We know that used vehicle buyers are concerned about the long-term health and performance of an EV. That lack of confidence makes for a harder sell for vehicle resellers and remarketers, which need help in setting used BEV prices and reassuring potential customers. Uncertainty over battery degradation, real-world range and access to an affordable and reliable public charging infrastructure are contributing to a lack of confidence among many drivers.
We need to discuss these issues, but also focus on highlighting the positives. EVs are cheaper to run for almost every rational use case and charging scenario. Infrastructure is still rolling out at scale, in more accessible and reliable forms. ESG and carbon reduction commitments are continuing to rise up the agenda for many organisations, adding an important, non-financial motive to the TCO argument.
“There is no use patting ourselves on the back for achieving the right 2030 Phase Out trajectory in new BEV sales, if we leave the used market trailing in our wake”
Here at the BVRLA, we are 100% focused on creating a supportive policy, regulatory and operational environment that enables our members to go out and do what they do best – provide safe, sustainable and affordable transport and mobility solutions to millions of customers.
Over the next few months, we will be working with the Government and colleagues across the fleet and automotive sector to promote battery health information that is reliable, accessible and useable. We will be talking to local authorities, airports and other transport planning hubs about the need for fleet-friendly charging infrastructure. We will be bringing the remarketing sector together to discuss ways of optimising the used BEV sales process. We will be publishing new research that provides a robust, metric-driven assessment of the fleet sector’s progress towards the 2030 Phase-Out. And we will be putting a diverse range of fleet operators in front of politicians and policymakers so that they can share their stories and ideas.
And the work will not stop there. It is no overstatement to say that the next few years will be a make-or-break period in determining whether the UK hits its 2030 Phase-Out targets or, ultimately, its 2050 net zero goal. We are in a race which, at the moment, feels like a marathon being run as a sprint.