Chinese car brands are expected to spark a new car price war this year, leading them to steal a sixth of the UK electric car market by 2030.
The prediction comes from Auto Trader in its latest Road to 2035 report, which further predicts dealers will be kept on their toes this year due to evolving new and used electric car sectors, particularly with used EVs, which saw record demand in 2023.
New electric car prices in the UK will fall due to competition from China and established manufacturers competing for market share, the report said, adding Chinese brands will snatch a sixth of the UK’s new electric car sales by 2030.
Awareness in brands such as BYD, GWM Ora and Nio is currently below 5%, but it is growing.
Searches for BYD cars trebled on Auto Trader’s marketplace in the days after news that BYD had overtaken Tesla as the world’s biggest manufacturer of electric vehicles in the final three months of 2023.
BYD accounted for more than 6% of all new electric car advert views on Auto Trader, the firm said.
The report also pointed to the gap between electric car prices in the Chinese brands’ home markets to the those in the UK.
The BYD Dolphin is on sale in the UK with a starting price of £25,000 compared with £13,000 in China, while the GWM ORA 03 (formerly the Funky Cat) is on sale for £31,000 in the UK but just £12,000 in China.
The report expects the government’s introduction of a zero-emission vehicles (ZEV) mandate at the start of January will also put downward pressure on prices.
The report also explained how ‘pockets’ of the used electric car market saw price parity with internal combustion engine (ICE) cars in 2023, resulting in record demand for used EVs.
The findings come as an Auto Trader poll of 1,649 dealers show that 11% of franchise retailers think the move to electric will be their biggest challenge in 2024 – even more so than the impact of the economic climate.
Overall, 5% of all retailers, including independents, selected the move to electric as the biggest challenge for this year.
Auto Trader commercial director Ian Plummer said: ‘The rise of China in electric cars will only add to that pricing pressure as they have the firepower to grab UK market share.’
He added: ‘Data shows that when price is no longer a barrier – seen in the success of salary sacrifice for new EVs and the pockets of price parity in the used market leading to record levels of demand – consumers are interested in going electric.
‘Now, the industry must address the same affordability concerns for retail buyers of new EVs so that they can realistically hit the growing ZEV targets.’