The electric vehicle (EV) market in the UK has been growing steadily and is about to enter a new phase, despite arguments that EVs are not selling well because they are primarily being purchased by fleet customers. Industry data from 2023 showed that 76% of EV sales were to fleets, with only 24% to private buyers. However, a key factor to consider is the definition of a fleet vehicle in the UK, where “salary sacrifice” schemes have become popular due to the potential savings they offer on owning an EV. These schemes can make owning an EV cheaper than an internal combustion engine model by reducing taxable income and monthly payments on the car.
While there is a perception that EVs are too expensive, the reality is that they can actually be much cheaper to purchase through a salary sacrifice scheme compared to traditional fossil fuel cars. Rates of BiK tax for EVs are significantly lower than for non-EVs, making them a more cost-effective option for consumers. This has led to a considerable number of EV purchases being used as personal vehicles through salary sacrifice, contributing to the higher fleet sales figures seen in industry data.
The growth of the secondhand EV market is another important development that signals the beginning of the end for internal combustion vehicles. As EVs purchased in the surge since 2019 begin to reach the end of their leases or ownership periods, more secondhand EVs are entering the market. While there is still a premium for purchasing a new EV, secondhand prices are becoming more comparable to traditional cars, making them a more viable option for budget-conscious buyers.
The rise of the secondhand EV market will also impact the home charger business, as used EVs are less likely to come with a charger included. This presents an opportunity for new entrants in the charger market to capitalize on the growing demand for home charging solutions. The commercial and public charging sectors are also expected to see increased demand as the EV market continues to grow.
Despite unexpected events like the Covid pandemic, the cost-of-living crisis related to the war in Ukraine, and other disruptions to the economy, EVs are becoming mainstream in Europe and China. While the transition from internal combustion to EVs may have been delayed, it is now picking up pace with the growth of the secondhand market and the increasing availability of charging solutions. The switch from ICE to BEV may be approaching a “point of no return,” signifying a significant shift in the automotive industry towards sustainable transportation.
