Political decisions will prove critical to electric vehicle uptake after General Election

The success of the EV market could pivot on two big political issues: the prospect of subsidies and the outcome of the forthcoming General Election.

Speaking at the What's New On The Road To 2035 webinar, Auto Trader commercial director Ian Plummer discussed the potential trajectory of the UK electric vehicle (EV) market and the impact of two major political considerations: subsidies for car buyers and the upcoming General Election.

On the subject of subsidies staging a comeback, Plummer was doubtful whether they would – or should - be available for new cars.

“They've done it. It didn't have huge impact. It helped mostly better off folks afford a car that's already very expensive and as a percentage of the value of the car, it was of limited impact.”

On the government's stance regarding new cars, Plummer noted, "The government seems to believe it's the OEMs' problem to sort out,” adding that because OEMs are already selling cars very effectively through fleet channels due to the fiscal incentives on offer, they simply don't need to put their own money into supporting cars rolling off production lines.

He said OEMs will most likely focus on increased consumer offers with many 0% offers and discounts becoming prevalent in the new car arena.

Plummer argued that government subsidies would be more impactful in the used car market in terms of future uptake – as well as environmental impact.

“We've seen already that used cars are turning very well. The price is already very keen but the fact that values are coming down so much is going to hurt funders and OEMs,” he noted.

He said supporting used cars could actually indirectly subsidise finance payments for new vehicles, making them in turn more accessible at a lower price point.

“By supporting used cars you can back-end subsidise finance payments on new vehicles and what you do is make them more affordable vehicles, more available to more people at a lower price point. So it's fair I think as well as greener to support used cars, as well as back-end supporting the new car market.”

Plummer asserted that subsidies on public charging rates to better reflect lower domestic electricity costs could also have a positive impact.

Regarding the upcoming General Election, Plummer speculated that its impact would depend on timing. Prime Minister Rishi Sunak has signalled it will be held in November although Plummer said that while he did not foresee a ‘euphoric’ year for new electric vehicle sales, he did expect progress towards EVs gaining a 20% market share.

“There's a whole cohort of people in our research that are EV-ready that we can convince to go with electric. If prices come down, they will go electric. What we need to do is convince them with a ‘seeing is believing’ kind of thing. They see their friends driving electric, they see more of them on the roads, they see positive stories in the media.”

“Over time, two or three cars changes down the road, even the reluctant will happily change to electric but I think we do have half the market to go at and that early majority we've always talked about is there for the taking - if affordability can be addressed.”