Trickle Down EV-nomics

The continued strength of UK EV sales not only points to a more robust market than some might fear, but also expedites the affordability of more sustainable mobility for all…

Nothing stirs the soul quite like a howl of a high-performance internal combustion engine revving flat-out to the redline. Yet we must concede that a more hushed era of mobility is being ushered in. We cannot deny the fact that the vast majority of the automotive industry has accepted that the future will be driven by electricity. However, there is still one thing slamming the brakes on many consumers’ readiness to embrace EVs: cost.

In the face of economic uncertainty and much-publicised criticism of the UK’s public charging infrastructure, it may seem like the sector, alongside the nation’s economy, could be heading for a downturn. But things are not necessarily as simple as they seem.

Thanks to the expense involved in developing the new technology, not to mention acquiring and assembling the rare materials necessary to build their batteries, manufacturers have, for the most part, marketed this initial wave of EVs as premium products, often SUVs. This is born out by the fact that, as of last year, the average price of a new EV in the UK was £48,650, a whopping 22 per cent more than the price of the average SUV at £38,015.

And yet EV sales are booming. More than 265,000 battery electric cars were registered in the UK last year, a 40 per cent increase over the year before. JBR’s own experience has been similar, with the number of EV models we provide finance for tripling from 2021 to 2022, while the number of internal combustion-powered vehicles on our books ‘merely’ doubled over the same period.

The Tesla Model X, S, 3 and Y made up four of our top five most sought-after electric cars, with the Porsche Taycan splitting them in third place and the Audi e-Tron, Mercedes EQC and Jaguar I-Pace completing the list. Elsewhere in the wider marketplace, models such as the Kia EV6, Hyundai Ioniq 5 and Skoda Enyaq have enjoyed great success at higher price points than their creators traditionally target.

Continued strength in the market suggests that, despite the cost-of-living crisis engulfing the country, there is reason to be optimistic about the resilience of the broader EV market. This observation must, of course, be treated with a side note of caution, as we are still in highly volatile waters with fresh squalls arriving by the day, mostly from outside UK.

Interestingly, the premium positioning, which some previously lamented, may turn out to be the EV market’s saving grace during these crucial years of adoption. By appealing to a demographic far more likely to charge at home than rely on public facilities, which is traditionally able to weather economic storms better, manufacturers have insulated the segment from the worst effects of household purse strings tightening.

Well, good for the rich, you may say. But good for the rest of us too. Unlike many other goods and services, which are the preserves of the better well-off, continued spending on new EVs will have tangible benefits for all. The capital manufacturers require to invest in better, more affordable technology will be partly funded by these sales. And strong new car sales are also vital for the long-term health of the used market, allowing cleaner, more efficient technology to gradually become more accessible to more people. Not to mention, most importantly, that we all share the same climate and breathe the same air.

And finally, although they may not be set to arrive with a raucous engine roar, there are lots of interesting and exciting new EV models set to join the market this year, not least the DeLorean Alpha5, Tesla Cybertruck, Kia EV9, Lotus Eletre and Rolls-Royce Spectre.