Written evidence from Mark Tisshaw (ELV0091) 

House of Lords Environment & Climate Change Committee inquiry: EVs

EV Market and Acquiring an EV

These questions relate to the UK EV market and uptake of EVs by UK consumers.

Responses from Mark Tisshaw, editor of Autocar and Autocar Business

8. What are the main routes for acquiring an EV? Which aspects of these routes are working well, and which aspects could be improved?

• Buying an EV is no different to buying an internal combustion car, as far as purchasing goes. The main hurdles are overcoming consumer objections to EVs (typically around range, charging infrastructure and cost) and, due to the post-Covid semi-conductor shortage, availability of supply (as EVs rely heavily on semi-conductors).
• There have been reports of some car dealership staff lacking knowledge of EVs when interacting with customers, although this issue is easing as increased training is undertaken.

9. What are the main consumer barriers to acquiring an EV, either through purchasing, leasing, or other routes?

• The primary barriers are concerns over EV range, access to charging (the vast majority of charging takes place at home, so off-street parking is highly desirable) and cost, which can be prohibitive for new retail buyers – although we are noticing that EV discounts have increased significantly in recent months.

10. How is the Government helping to ensure that EVs are affordable and accessible for consumers, and are these approaches fit for purpose?

• The most successful Government policy to incentivise EVs has been the reduced benefit-in-kind tax that EVs attract for company car drivers (2% at present Vs 30% for a 1.5-litre petrol VW Golf) but an unintended consequence of this policy has been to drive EV adoption among business and fleet buyers (almost 80% of all EV sales) – which serve to weaken resale values of EVs when they reach the secondhand market.
• The end of the Plug-in Car Grant has left private and retail EV customers poorly served.
• In London, a scrappage scheme providing up to £2,000 towards the cost of a replacement ULEZ-compliant vehicle was announced at the start of this year for private car buyers. While this was initially only available to families receiving child benefit payments, but it has now been extended to all Londoners.
• At a local level, councils are responsible for installing EV charging infrastructure but the nationwide picture is patchy with some regions much better served than others. The focus here tends to be on the provision of high-speed rapid chargers across the trunk road network, but the provision of local on-street charging, where people live, is as important to creating a functioning EV eco-system as most EV charging is carried out at home.

11. Do you think the range of EVs on offer in the UK is sufficient to meet market needs? Which segments are under-served and why? Why is the UK market not seeing low cost EVs, particularly in comparison to China?

• An increasing number of manufacturers are working on affordable EVs, and Chinese manufacturers are a good example of this. Naturally, EVs have a certain minimum cost to build, and that cost is lower in China due to different market and labour regulations – it will be interesting to see the outcome of the recently announced EU anti-subsidy investigation into Chinese EVs.
• Many of the lower-cost EVs that are offered in the Chinese market also have notable limitations in areas such as size, range, build quality and safety.
• We are tracking a rise in discounts available on new EVs and waiting times are coming down, which suggests the supply and demand is balancing out.

12. What is the future role of L-segment and personal light electric vehicles, and how will that impact car ownership and usage? What is inhibiting their uptake?

• There are an increasing number of light-electric vehicle options, such as the Citroen Ami quadricycle, which will have some appeal in urban areas. Their uptake is inhibited by their lack of refinement and practicality (in terms of size and range) compared to full-size cars, but are more expensive than alternatives such as e-bikes and e-motorbikes – and cannot benefit from the ability of those to avoid congestion.

13. What is your assessment of the current second-hand EV market? How is the second-hand EV market projected to develop between now and the phase out dates?

• Experts are predicting used EV values are heading towards a collapse, due to the threat posed by business and fleet market (which has been incentivised into EV adoption by attractive tax policies) ‘dumping’ large numbers of vehicles into the secondhand market, creating over-supply, and weakening consumer demand.

14. What is the relationship between EV leasing and the second-hand market and how do they interrelate?

• As with traditional ICE vehicles, EV models operated by fleets will emerge into the used market when their lease agreements end. At this point they are subject to laws of supply and demand, so their values will be determined by the consumer appetite for secondhand EVs. At this point, perceptions around EV driving range (which is heightened among used buyers, as consumers are wary of battery degradation in older EVs) and charging infrastructure remain.
• If resale, or residual, values are low for EVs, this will impact their attractiveness to new private buyers, most of whom buy on finance. PCPs are the primary method of financing privately purchased new cars and their structure – and affordability – hinges on monthly payments that cover only the difference between the new price of a car and its value at the end of the agreement – so, the lower its residual value, the higher the monthly payment required to fund it.

15. What barriers are there to achieving a sufficient supply of second-hand EVs, mindful that second-hand vehicles make up a high proportion of all vehicles purchased?

• In order for there to be more second-hand EVs, there must first be more new EVs – as per our responses to the above, fleet uptake is driving EV adoption. The aim now is to ensure sufficient used demand for EVs as they reach used motorists. There is a degree of uncertainty about how second-hand EVs perform, with concerns about battery degradation being high on the list for consumers.

16. What is the value and role of alternative transport models such as car clubs and micro mobility vehicles in the Government achieving the 2030 phase out date, and how should the Government consider their roles and opportunities for use in transport decarbonisation?

• Car clubs can play a useful role for people who occasionally require a car, but their comparatively high costs, limited availability and reduced convenience means private ownership will remain the preferred choice for most motorists. Micromobility vehicles can play a useful role in certain situations such as commuting in urban areas – but will not be able to replace cars in some situations, such as rural use, shopping trips and transporting families. 

17. Are consumers charged higher rates of insurance for an EV when compared to an internal combustion engine (ICE) vehicle, and if so, are these higher rates justified? Can the Government do anything to mitigate this?

• Insurance for EVs is more expensive than conventional ICE vehicles for a number of reasons – the high upfront prices, repair costs and spares prices mean that insurance rates are typically higher. As the cost of new EVs decreases the cost of insurance should decrease with it.