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BVRLA Chief Executive Toby Poston comments: Are we starting to see green shoots emerge within the used electric car market? The latest SMMT figures show record growth in used EV transactions, with battery electric vehicles once again the fastest-growing fuel type in the second-hand sector. Coupled with that is data from Autotrader indicating used EVs are holding their value better than before.
Given the chasm we’ve seen between the supply of used EVs entering the market and the relative demand for them, these are encouraging signs.
Having a healthy used market matters. Too often, the headlines around electrification focus on the new car market, yet it is uptake of second-hand models that will ultimately determine whether the transition becomes truly mainstream.
For many consumers, a used vehicle is the first – and only – realistic entry point into EV ownership. Stronger demand in that market, translating into physical transactions, indicates that awareness is improving, confidence is building and more drivers are beginning to see electric vehicles as a practical and affordable proposition.
That progress should be welcomed, but we should also be cautious about assuming the market has fully turned a corner.
There is no doubt that wider global uncertainty is influencing consumer behaviour. Rising fuel prices, ongoing geopolitical tensions and continued pressure on household finances inevitably sharpen the appeal of lower running-cost motoring. Electric vehicles benefit in that environment. However, if we want long-term success, the transition cannot rely on short-term external shocks to drive sustainable demand.
The challenge for policymakers and industry alike is ensuring this momentum becomes structural growth rather than a temporary reaction to circumstances outside our control.
That means addressing some of the barriers that still exist within the used EV market. Affordability remains a key issue and will come back into focus when pump prices stabilise. Concerns around charging infrastructure, battery health and residual values also continue to influence purchasing decisions, particularly among drivers making the switch for the first time.
The good news is that these are solvable challenges. But they require targeted support and clear policy direction.
One of the most effective measures government could introduce would be a dedicated Used EV Benefit-in-Kind rate. Company car tax policy has been hugely successful in stimulating the new EV market, helping fleets drive adoption at scale. But there is currently no equivalent mechanism supporting the used market, despite the fact that ex-fleet vehicles are critical to supplying affordable second-hand EV stock into the wider consumer market.
A Used EV BiK rate that more accurately reflects a vehicle’s actual market value, rather than its original list price, would create another important route into electrification for employees and businesses alike. Crucially, it would also strengthen the wider ecosystem by supporting healthier residual values and improving confidence across the market.
Alongside this, government should seriously consider extending the Electric Car Grant to used vehicle transactions. If the objective is mass-market adoption, policy cannot focus solely on new cars. The overwhelming majority of motorists buy used, not new, and many households simply cannot access the benefits currently concentrated at the top end of the market.
Such a scheme is not without its complexities, but it represents a critical opportunity to make the transition accessible to more households.
Supporting used EV purchases would help democratise access to zero-emission motoring and ensure the transition is seen as inclusive rather than exclusive. It would also accelerate fleet renewal, helping older and more polluting vehicles leave the road more quickly.
The fundamentals for success are already there. The range and quality of used EV stock is improving rapidly as larger volumes of fleet vehicles enter the market. Consumer familiarity with EV technology is increasing. Running-cost advantages remain compelling. Dealers, leasing companies and fleets are also becoming more experienced in supporting customers through the transition and offering new ways to manage their mobility.
The direction of travel looks positive, but we should resist the temptation to view a single set of strong figures as proof that the job is done. The transition to electrification will be measured over years, not months. Sustained consumer confidence requires stable policy, targeted incentives and a recognition that the used market is not secondary to the transition. It is central to it.
