Electric car? No thanks
Sales of second-hand electric cars are booming. Auto Trader, the market leader, reported this week that they are up by 63 per cent in the first half of 2024 compared with a year earlier. In explanation, Ian Plummer, the company’s commercial director, told the FT: “We have reached that price parity point that bridges the affordability gap for the consumer,” Buyers, he said, were seeing the attractions of EVs now they were not being punished in the wallet for “doing the right thing.”
Well, how nice. The upbeat report in the FT included a chart from Auto Trader. The price of a two-year-old Tesla model 3 has not so much fallen, as collapsed, from £47,000 to £26,000 in two years. That’s almost £2,000 a month. Just as well, then, that the vast majority of drivers of these cars were not using their own money, but that of their employer. The tax rules make buying a conventional company car ruinously expensive, while EVs attract a handsome subsidy.
For comparison, Auto Trader included the price of a two-year-old BMW 4-series. It turns out that prices here, half that of the Tesla then, are a third higher now. The logical conclusion from these numbers is that, if the price is low enough, we’ll buy electric, but on the whole we’d rather not. They may be a bargain today, but the battery is two years nearer its end of life, and that is up to half the cost of the new car.
The early adopters, second-car-runabout buyers and corporates that dominate the market for new EVs are dumping their older models. The Society of Motor Manufacturers and Traders, the leading cheerleaders for these cars, is always telling us how well they are doing, while calling for more subsidies.
By contrast, here is the British Vehicle Rental and Leasing Association (both bodies might usefully find shorter names): “In a landmark year for road transport decarbonisation, electric car registrations are stalling, demand for electric vans is falling, while the used market for EVs faces collapse. Early momentum is waning. We have over one million zero-emission vehicles on the road, yet demand is imbalanced.” It continues: “The cumulative decrease in residual prices for EVs since September 2022 has been 51% compared to 11% for petrol.”
It will get a lot more embarrassing for the new government. The rules force the carmakers into selling a progressively smaller proportion of traditional cars. There is already a glut of electric cars, and the Auto Trader stats reflect what happens when legislation pushes supply and demand out of balance. So get that nearly-new petrol car before prices go even higher.
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