Demand for electric vehicles is showing signs of going into reverse as sky-high price tags and the wider cost of living crisis are putting off all but the wealthiest, according to a report.
The share of new buyers searching for electric vehicles (EVs) on Auto Trader’s marketplace slumped from a high of 26 per cent in September last year to 16 per cent in February. Buyers appear to be switching back to petrol and hybrid vehicles, with the latter accounting for almost one in five new car ad views in January, compared with eight per cent a year earlier.
This comes despite the Government’s ambitious net-zero push and rules that will mean sales of new petrol and diesel cars are banned from 2030. Auto Trader’s Road To 2030 report reveals that the price of EVs and the tightening squeeze on household finances from rocketing inflation means they are fast becoming the preserve of the wealthy.
Prices of new EVs are typically 35 per cent – or £10,000 – more expensive than petrol or diesel cars, with the number of EV models priced under £20,000 on Auto Trader’s marketplace dropping from 11 in 2020 to three last year. Its report showed that more than half (55 per cent) of buyers looking at EVs earn more than £50,000 a year.
Erin Baker, editorial director of Auto Trader, said: “Sooner or later we will run out of people who are rich enough to buy electric cars, and the latest data from our marketplace could be an early indication of what’s to come. It’s a canary in the coalmine and the Government needs to take notice.”
There are fears that demand for EVs may be hampered further when current incentives are due to end, with the Plug-In Car Grant due to finish in 2023 and the benefit-in-kind tax break set to stop in 2025. “There are enough wealthy motorists out there to drive sales for now, but if EVs don’t become more affordable soon, the mass adoption that the Government is banking on will not materialise,” Ms Baker said.
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