Wednesday, September 20, 2023

Sales Of Electric Cars Fall As Market Forces Bite

Costs and lack of charging network deter drivers

September 20, 2023

Hyperbolic propaganda of the advantages of 'clean, green' electric cars has been punctured by figures revealing a fall of more than 11 per cent in the sale of zero-emission vehicles to private buyers.

Commenting on the figures released this week The Society of Motor Manufacturers and Traders said that motorists are being put off buying electric because of the high cost of the vehicles, (an entry level electricv family car costs as much as fossil fuel powered, executive range model from a quality brand,) uncertainty about whether a government ban on petrol and diesel cars can be enforced, the difficulty of selling EVs on the second hand market, the cutting of financial incentives, range anxiety and fears about the lack of an adequate public charging network.

Ministers and the industry have been waxing lyrical about the rise in sales of electric cars for years, claiming  rising sales has been a sign that Britain is ready to move from the “early adopter” stage of battery electric vehicle (BEV) ownership to mass market. Funny how the rise came to an abrupt end once buyer subsidies were removed, just as it had in Germany, Denmark and Sweden.

However, the number of electric cars bought in the first half of 2023 was down on the comparable period of the previous year, with the huge drop in sales to private buyers accounting for most of the loss of sales. Fleet operators and contract hire companies continued to support the electrification of personal transport as their businesses still benefit from subsidies and tax breaks while incentives to private buyers have largely disappeared.

In his review of net zero policies, deatiled in a televised speech today, Rishi Sunak announced postponment of the proposed ban on the sale of new petrol and diesel cars from 2030 to 2035.  But it is by no means certain the car industry can actually meet that target as there are already vast acreages of what was formerly agricultural land now pack with thousand of unsalable electric vehicles as the predicted public enthusiasm for flushing money down the toilet failed to materialise.

While headline sales of electric cars might seem to be healthy  the details tell a different story. Sales to corporate buyers are buoyant, encouraged by a favourable company car tax regime. But sales to private buyers are faltering. In the first half of the year, 37,000 private buyers bought an electric car, down from 41,800 a year earlier. So how can total sales have held up?

The fleet operators, large corporations and car hire companies, are given huge discounts (up to 40%) on list prices because they buy bulk. On top of this there are subsidies and tax breaks for buying electric. These corporate owners then tend to replace the vehicles they buy as an early stage in the car's life. And a lot of the electric cars bought last year are now choking up the showrooms and forecourts of second hand car dealers. The dealers are already refusing to take more pre - owned EVs, simply because they can't shift existing stock so by next year we can expect to see fleet sales dropping because the operators will not be able to offload existing stock at acceptable prices. 

So far, the private market for electric cars has been dominated by wealthy early-adopters buying them as second cars, town runabouts for shopping trips and school runs. The reasons of those buyers for choosing electric include virtue signalling, impressing the neighbours and simply ostentatious displays of wealth. Downmarket a little, pragmatism has a much greater bearing on the buyers choice

It is painfully clear that electric cars are not yet selling themselves on their merits. They have been sold with the help of of generous grants and tax breaks from government and huge amounts of free publicity from mainstream media, but now those government incentives are winding down and news media are losing interest,  buyers are looking more critically at the problems of owning an electric car: namely the higher purchase price, the short range, the length of time it takes to recharge and the paucity of the recharging network.

Maybe one day someone will launch a competitively priced electric car which can travel 500 miles between charges and takes no more than 15 minutes to recharge, at which point electric cars will become as useful as petrol ones. Toyota has claimed it will produce such a car by the end of the decade, (but don't bet your life savings on it.) In the meantime, the government is trying to force a product on motorists which they are going to be reluctant to buy.

The obvious answer would be to allow motorists to gravitate towards electric cars gradually via hybrids. The trouble is that the government has promised to outlaw new sales of these too. As a result, the industry has been disincentivised from developing the concept of a hybrid. Most of the hybrids on offer are really just token efforts – ‘mild’ hybrids designed to extend the life of existing ranges while meeting government targets, but which will spend most of their time being powered with large, gas-guzzling petrol engines.

It's all bollocks really.


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