Fuel price crisis re-ignites EV demand

Demand for electric vehicles (EVs) is increasing as fuel prices spike, according to Auto Trader.

The proportion of electric cars viewed on its marketplace had dropped from a high of 26% in late September 2021 when the petrol crisis took hold, to just 16% in February. But since prices at the pumps started to rocket, so has consumer interest. In the past week alone, Auto Trader says car buyers are conducting 27% more advert views for new EVs than they were the previous week, and now account for 20% of all advert views.

Ian Plummer, Auto Trader’s commercial director, said: “At a time when consumers are facing increasing financial pressure, it’s perhaps no surprise that even the more affluent motorist may be hesitating to make the switch to EVs.”

Plummer believes there’s a clear opportunity for the industry to highlight the lower running costs of EVs.

“Our analysis shows that EV owners can save £140 every 1,000 miles, which is up on the £100 we recorded just a few months ago – it’s this level of detail on cost savings that will be key to softening the impact of the green premium and bringing EVs into line with their petrol or diesel equivalents” he added.

Last year, EVs accounted for 11.6% of all new car sales, up from 6.6% in 2020, driven, in part, by manufacturers offering more choice than ever before, with four times as many new electric models available on Auto Trader compared to 2020. Auto Trader believes the headline figures tell a misleading story, however. It says the UK will “run out” of people rich enough to buy electric cars.

It’s Road to 2030 report shows that 55% of those looking at a potential EV purchase have incomes above £50,000, far higher than the 37% of Auto Trader’s overall audience in that bracket. And more than half, or 56%, of EV viewers were 45 or over, compared to 45% of the marketplace’s audience overall.

Equally, the SMMT is warning of a pricing "double whammy" for EVs. Vehicle manufacturers are already facing a rise in the cost costs of materials such as lithium and cobalt, key to electric vehicle production, with some experts expecting this alone to be enough to push vehicle prices up as the car parc increasingly electrifies. 

Auto Trader believes that incentives are key to driving adoption, as they help average earners cover the upfront cost and stimulate the demand needed to make affordable EV production commercially viable.

Plummer said: “We need to see EVs become genuinely attainable for everyone, not just the wealthiest car buyer, with sufficient model and price point options that meet every need. We firmly believe, that realising this objective will require an increase in Information, Investment and Incentives from industry and Government with collaboration between the two. Unless these areas are addressed, the road to 2030 is at risk.”