Government decarbonisation targets are at risk unless it acts now to strengthen demand for used electric vehicles, the BVRLA has warned.
The leasing association has said that Used EV grants, tax incentives and a “confidence-building campaign” would “boost demand and stabilise prices”.
It comes as there has been a reduction in the price of EVs as the first wave have hit the market at the end of their lease deals.
The BVRLA has said there is an “urgent need” for intervention, which was highlighted by forecasting from Oxford Economics, which shows that used electric vehicle (EV) prices will carry on falling over the rest of this decade.
Between 2024 and 2030, used EV car prices are predicted to fall by a further 28%. The electric van market will also see used prices drop, by 12%.
Although the BVRLA said this was “good news” for used EV buyers, the scale of “value destruction” was being absorbed by the leasing industry, which was responsible for 75% of EV registrations – and was “unsustainable”.
Falling confidence in used EV values is already pushing up lease rates and deterring potential customers. Oxford Economics modelling estimates that this combination of reduced trust and rising lease rates will result in nearly 300,000 fewer new EVs being registered between 2023 and 2027.
BVRLA Chief Executive, Gerry Keaney, said:
“The crisis we are seeing in the used EV market is a direct threat to the Government’s ambitious ZEV Mandate and ICE Phase Out targets.
“New EVs are expensive while used EVs are stunningly cheap and getting cheaper, but someone needs to pay for this price gap.
“It is motor finance companies and new EV drivers that are footing the bill, through massive depreciation and increased lease rates. These are the fleets and customers that have been responsible for driving demand for EVs up to now. We cannot afford for them to lose confidence in the transition.”
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