Electric Car Supply Exceeds Demand, Says Leading UK Car Dealership

Model Y cars during the opening ceremony of the new Tesla Gigafactory for electric cars in Gruenheide, Germany, on March 22, 2022. Patrick Pleul/Pool via Reuters

The supply of electric cars exceeds the demand by buyers, a leading UK automotive retailer has reported.

New trading figures, by Vertu Motors, the third-largest car dealership in the UK, showed an imbalance in the pipeline stock of electric vehicles.

In response, manufacturers offer discounted prices and finance rates to stimulate retail demand, the company said.

The dealership reported a “robust” demand for electric vehicles, which is “currently critical to the electrification of the vehicle parc.”

Electric car prices have been dropping on a year-to-year basis, according to Bautomotive online marketplace Auto Trader. This is due to supply growth outpacing consumer demand.

According to its latest trade data, Auto Trader reported the average retail price for an electric car to be £31,622, down 20.7 percent on the last year. In contrast, the prices for used petrol (£16,519) and diesel (£16,570) cars have gone up.

“There are clear indications, however, that the market is stabilising,” Auto Trader said.

In terms of the speed at which they’re sold, electric vehicles are gradually becoming the fastest to leave the retailers’ forecourts.

With the expansion of the ultra-low emission zone (ULEZ) to cover all of London, car owners, whose vehicles don’t meet the standards, can either choose to upgrade to a new car or pay a £12.50 daily charge to drive within the zone.

Under current Government plans, the sale of new cars powered solely by petrol and diesel will be banned from 2030 across the UK. The final stage of the plan aims to see all new cars and vans be fully zero emission from 2035.

Car Production

Car production has already seen signs of responding to policies, with manufacturers producing more electric vehicles.

The Society of Motor Manufacturers and Traders (SMMT) said that in July the production of high-tech hybrid electric (HEV), plug-in hybrid and battery electric vehicles (BEVs) has grown by 73.9 percent to 30,180 units.

This represents almost two in every five cars made in July. Since the beginning 2023, car makers in the UK have manufactured more than 200,000 of these vehicles, twice as much as in the same period last year.

“Six months of growth shows that British car production is recovering and, with electrified models increasingly driving volumes, the future is more positive,” said SMMT chief executive Mike Hawes.

Drivers in Britain also have seen their choice of battery electric car models quadruple in the past five years. Drivers can choose from 80 options, available across every vehicle segment, the SMMT said. This compares to just 21 options in 2018, with currently one in four car models being available as a battery electric vehicle.

Overall, UK car production enjoyed a growth of 31.6 percent and saw 76,451 units rolled off factory lines.

Despite the sixth consecutive month of growth in production, manufacturing has remained 29.4 percent lower than the pre-pandemic levels.

Costs

Whether drivers can afford to switch to electric vehicles, even with the increased supply and variety of models, may be affected by high inflation rates and energy costs.

Earlier this year, Stellantis, which owns Vauxhall, warned that the middle classes cannot afford the cost of electric cars without the support of state subsidies. Charging costs and the availability of charging points across the country are of concern to drivers.

UK consumer champion Which said that electric car owners who have an off-street parking permit and a home charger, can access the cheapest rates and save “a considerable amount of money compared to paying for petrol or diesel.”

Drivers who have to rely on public charging points will pay more.

The fastest way to charge an electric car is to use a public rapid or ultra-rapid charging point. However, Which has warned that this is the most expensive option for car owners, who will end up paying more per mile than a petrol or diesel.