9:19 am, May 12, 2025
The ZEV Mandate is supercharging EV sales, making the UK the largest market for electric cars in Europe. But this evolving car market is presenting a number of challenges for car dealers.
That’s the view of Black Horse, which recently gave Car Dealer an overview of how the ZEV Mandate is shaping the car market.
‘There is no doubt that the ZEV Mandate is moving the needle – the UK is now the biggest market for EVs,’ Black Horse’s consumer distribution director, Preston Rogers, says.
‘It is undoubtedly moving the industry on faster than otherwise would have been the case, but the OEMs and dealers who are really struggling may take a different view.’
Recent amendments to the mandate announced a few weeks ago, provide more clarity and certainty, which provides a foundation for businesses to build on. This will make planning and production allocations more concrete, with tariffs impacts notwithstanding, believes Rogers.
Compounding the need to boost EV sales is private buyers not willing to splash the cash on a new one. We see early signs that this is trending higher, but nowhere near historic levels.
Fleets are the major market for new EVs and many customers are choosing to lease rather than use traditional finance products, changing the sales process for dealers.
‘We do see that for EVs, retail finance is not where it’s at,’ says Rogers. ‘It’s quite hard to shift cars in the retail channel.
‘Some of that is because of where the cars have been priced historically – the gap between BEVs and ICEs. If you’ve got an EV that is for example, 60% more than its ICE equivalent, then it’s going to be extremely hard to sell to a private buyer. That gap is getting smaller and it’s only going to go one direction, but it has been and currently remains problematic.’
Black Horse is seeing more customers choosing residual value guaranteed products, such as PCP and lease for EVs.
There is no doubt that the ZEV Mandate is moving the needle
‘The EV market is changeable– the technology is in its early stages, let’s not forget. Customers feel uncertain – they’ve seen the price falls of used EVs, and there may be anecdotal evidence of them knowing someone who has lost money on an EV in the past.
‘Often, customers just need a guarantee, and if dealers are able to say that they can take that risk away from the customer with great finance products, a sale can be closed.’
It’s a little different when it comes to used EVs though, says Rogers. With used EVs, the market is more traditional, with customers more likely to accept taking HP products because there is less risk.
Black Horse is seeing more EVs being financed, however, despite consumer uncertainty.
The number of EVs it is financing has risen from one in 12 in 2023 to one in 10 last year, and while this is dominated by the brands it partners, non-traditional brands are rising to the top.
Chinese-owned British brand MG is now in Black Horse’s top three most financed brands list, along with Ford, Vauxhall, BMW, and Mercedes amongst the most popular.
This shift towards EVs in the used market is only going to continue, believes Rogers, but it’s going to take its time. ‘The Ford Fiesta isn’t on sale anymore, and yet there’s still huge demand for it. As more factories switch from ICE to EV, those ICE cars won’t be available, but customers will still want them.
‘However, what we do see is that once customers have tried an EV they tend to stay, especially if they have home charging. During 2025, there will still be question marks over EVs, but once we get into 2026/7 the narrative will change – consumers will be saying “I’m going to get an EV at some point”. Then there will be unstoppable momentum.’
Speaking of momentum, Rogers believes that when the biggest car dealers really get switched on to electric, the used market will pivot towards EVs.
‘The big price falls on used EVs was quite unhelpful as a lot of independent dealers were starting to stock them, their values dropped and then they had a lot of stock hanging around. Today, EVs are turning fast – and faster than ICEs in most cases.
‘When we work with EV-only dealers, you can really see this change happening as they are having a great time of it now. ‘It’s when the biggest players are buying EVs en masse that’s when we’ll see solid ground in residual values and that’s when there’s going to be real momentum towards EVs.’
For the use of motor dealers and other motor professionals only. Black Horse Limited. Registered Office: 25 Gresham Street, London EC2V 7HN. Registered Number: 661204 England and Wales. Black Horse Limited is authorised and regulated by the Financial Conduct Authority.
