Demand for electric vehicles stutters as cost of living crisis begins to bite

  • Auto Trader said EVs accounted for fewer than a fifth of new car inquiries sent to dealers last month
  • High energy prices and concerns over government policies are concerns
  • Data comes as used car prices of EVs fell in November

Time 7:47 am, December 13, 2022

Consumer appetite for electric vehicles is waning new figures show, with demand falling amid the cost-of-living crisis.

EVs have accounted for fewer than a fifth (19 per cent) of car dealers’ enquiries through Auto Trader, the marketplace said – down from 27 per cent in June.

Auto Trader also reported that the number of searches and advert views for used cars has fallen by 12.6 per cent in the past 12 months.

That is the first year-on-year decline since April 2020, shortly after the start of the coronavirus pandemic.

Auto Trader noted that the fall in demand for EVs coincides with rising energy prices, petrol and diesel prices softening, and concerns about government policy over EVs.

Chancellor Jeremy Hunt announced last month that new zero-emission cars will no longer be exempt from vehicle excise duty from April 2025.

Used EV stock levels have also doubled from 10,600 at the start of 2021 to 20,600 in Q3 2022.

Auto Trader has pushed back its forecast for when EVs will account for 50 per cent of new car sales from 2026 to 2027.

The slowdown is a temporary one, said Auto Trader’s commercial director, Ian Plummer.

‘With running costs still in EV’s favour, and with an improving pipeline of more affordable electric models, particularly from Asia, we anticipate the slowdown in demand to be a temporary one,’ he said.

‘It is, none the less, a significant pothole on the road to 2030, and highlights that urgent action is required to drive adoption beyond just the most affluent who can afford the “green premium” of EVs.

‘Education and transparency will be key to overcoming barriers to entry, and the entire automotive industry will need to come together to play a vital role in demystifying EVs, especially in informing car buyers on potential TCO savings, growing range potential and expanding re-charging solutions.’

Auto Trader said that due to the influx of used EVs onto the market, creating trust in used models will be ‘essential’.

Plummer added: ‘Despite the softening in consumer appetite, demand is far from collapsing, and given the wider slowdown of sales of younger age cohorts of petrol and diesel stock, the surge in second-hand EVs represents a profitable opportunity for the used car market.’

Monthly registrations data from the Society of Motor Manufacturers and Traders (SMMT) reveals plug-in cars accounted for 28 per cent of the new car market in November.

Earlier this month Car Dealer reported used car values fell 1.2 per cent in November, with prices of EVs tanking.

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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