EV and hybrid finance offers reach parity with ICEs

While May was a strong month for private registrations (up 10% year-on-year), retail demand is still down 5.7% for the first five months of 2018 compared with the same period a year earlier.

Warmer weather in May helped to boost footfall at dealerships and manufacturer offers continued to entice, but among the things on consumers’ minds may have been Brexit and the Government’s forthcoming Road to Zero strategy.

This is likely due in the next few weeks, but it could have a big influence on how the market plays out during the next plate change in September. The strategy should bring more clarity on how internal combustion engines will be phased out and how hybrids will be treated from a tax and incentive perspective.

AM’s retail offer data shows there are options at the more affordable end of the spectrum for alternative powertrain technology, with Hyundai’s Ioniq hybrid priced from £215.85 a month after a £4,248 deposit and Renault’s pure EV Zoe at £219 with a slightly lower deposit at £3,579.

The PCP pricing puts alternative technology on price parity with traditionally engined cars.

BMW’s i3 comes with the lowest APR rate, at 2.9%, and a monthly price below £330, although the deposit level is quite a lot higher at £6,474.59.

The Mitsubishi Outlander PHEV also has a higher deposit point to get the monthly payments down to a more affordable £315.32 a month, but should be achievable for customers trading in a car with strong residual values.

Mitsubishi is having a good 2018 so far with registrations up 14% to 8,586 units year-to-date. It has been given a boost by the arrival of the Eclipse Cross crossover at the start of the year and its smaller entry-level models, the Mirage, ASX and the Eclipse Cross are all within the £300-a-month range with accessible deposit levels.

At the other end of the spectrum, Fiat is having a tough time so far this year, with registrations down 31% as of the end of May to 16,333 units. That leaves the dealer network with a 7,300-unit deficit over this time last year.

Some manufacturers are having conversations with dealers to help adjust quarterly targets to realign expectations with demand at the half-year point, but if those discussions are not happening across the Fiat network, dealers’ Q1 and potentially Q2 bonus payment levels could pile on more pressure for the second half of the year.

Fiat’s model range is built around the 500 city-car and dealers will be hungry for a next-generation model – it last received a facelift in September 2016. A new 500, along with an estate version may reinvigorate interest for the dealer network. Fiat is also launching an electric version within the next couple of years that it hopes will help to bring the brand up-to-date with rivals.

While the network waits for Fiat’s product cycle to kick into gear, it cannot point the finger at the manufacturer’s finance offers for failing to help retail demand. There are low-deposit levels across the board and every model in the range is priced at below £300 a month with a mixture of PCP and PCH examples.