Help from the UK Government for the used EV sector is now “essential” after the announcement of grants for new vehicles, according to the Vehicle Remarketing Association (VRA).
The new Electric Car Grant, offering up to £3,750 off the price of a new EV, was announced earlier this week.
VRA chair Philip Nothard said that bringing down the price of new EVs made the need for similar action in the used market even more pressing.
He said: “The key point here is to recognise that the entry point to the electric car market is, for most motorists, a used electric car – especially bearing in mind the depression in values that has been seen over the last couple of years, with some models now cheaper than petrol equivalents, despite much higher purchase prices.
“Yes, it’s a positive move that new electric car prices will be brought down by the new grant but it’s something that will have a limited immediate effect because used car buyers outnumber their new car counterparts by almost five to one.”
Nothard argued that government support for the used sector would be a more cost-effective move.
He said: “There are many more buyers in the market for a sub-£20,000 used electric car than a £37,000 new one. A grant of £1,000 on a two-year-old electric SUV priced at £18,000 is arguably much better value than £1,800 on a £35,000 new example.
“There are, of course, other possibilities for intervention. The used car market doesn’t have to be supported with grants. For example, zero interest loans have been offered in some countries to encourage used buyers into electric cars, which is an option that could cost the government relatively little to adopt.”
Nothard said that in a worst-case scenario, values of used electric cars would be further depressed by new EV grants.
He said: “This is quite a difficult impact to predict because used electric car values are already very low but if a dealer owns a 12-month-old example of a particular model and the new version is suddenly £3,750 cheaper, it’s likely to impact on its value.”
