Government decarbonisation targets are at risk unless it acts now to strengthen demand for used electric vehicles. Used EV-targeted grants, tax incentives and a confidence-building communication campaign would boost demand and stabilise prices, which are slumping as a wave of electric vehicles hits the market at the end of their first lease. This forecasting by Oxford Economics highlights the urgent need for intervention.
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Between 2024 and 2030, used EV car prices are predicted to fall by 28%. This fall is on top of an existing slump that has already seen them lose half of their value over the last two years. The fragile electric van market will also see used prices drop, by 12%.
While good news for used EV buyers, the scale of value destruction being absorbed by the vehicle leasing industry, which is responsible for 75% of new EV registrations, is unsustainable. Falling confidence in used EV values is already pushing up lease rates and deterring potential customers from taking the leap to zero-emission motoring.
Oxford Economics modelling estimates that the combination of reduced trust and rising lease rates will result in nearly 300,000 fewer new EVs being registered between 2023 and 2027. Annual new EV registrations only just reached the 300,000-milestone last year.
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