Electric car prices plunge as demand slows – with more discounts predicted
Almost eight in 10 electric cars on Auto Trader were being advertised at a discount last month.
In total 77% of EVs were on offer, up from 55% the year earlier.
And the value of the discounts has also soared - now at a record 11%.
It comes as Tesla speeds up plans to release a range of cheap cars after it saw the biggest drop in sales in more than a decade. It said times were "uncertain" after recording a 55% drop in profits in the first three months of 2024.
Vehicle manufacturers are under pressure to sell more electric vehicles under a zero-emissions mandate. The Government says 22% of vehicles sold by major car makers must be electric this year, with the target increasing every year until a complete ban on new petrol and diesel cars in 2035.
Those who don't hit the quota will be forced to pay fines or trade carbon credits with other manufacturers.
That means discounts could get even bigger in the scramble to hit targets, Auto Trader said.
NimbleFins research shows the average price of an electric car in the UK is about £50,000, with prices starting at about £22,225.
Auto Trader said petrol cars had also been discounted, but EV prices were dropping more dramatically.
Nearly a third (31%) of EVs are being cut by 10% or more, while this is 24% for petrol cars.
Ian Plummer, commercial director of Auto Trader said: "Sales of electric vehicles are rising but as growth is still being driven from the fleet side of the market, more needs to be done to stimulate electric vehicle demand among private buyers where affordability remains the number one barrier.
“That said, manufacturers and retailers are fighting harder than ever to tempt customers… and that trend only looks set to accelerate as manufacturers struggle to meet strict zero emissions vehicle mandate targets in a much more competitive landscape.”
Increased interest rates have made it more expensive for consumers to buy electric vehicles which already come with a high price tag and there’s scepticism about their reliability. NimbleFins previously reported some EVs had 80% more problems than petrol equivalents.
Electric vehicles appeared to be on a roll last year with NimbleFins reporting twice as many EVs were sold on the used car market year on year in the third quarter of 2023. But momentum can only be sustained with robust new vehicle sales, the Society of Motor Manufacturers and Traders said.
It has called for a VAT cut on new EVs to be able to meet second hand demand.
Sales of battery-powered cars dropped 11.3% across Europe in March, the Telegraph reported.
And 15.2% of all cars sold in the UK in March were electric, dropping from 16.2% the year before.
Tesla founder Elon Musk says the future is fully electric, but has had to drop his prices due to increased competition, especially from Chinese car makers such as BYD, which are selling hybrid and battery electric vehicles at a much cheaper price.
Tesla discounted its Model Y to the equivalent of £28,500 in China to boost sales. The price was slashed in the US to £35,000.
He said: “A lot of other auto manufacturers are pulling back on EVs and pursuing plug in hybrids instead. We believe this is not the right strategy, and electric vehicles will ultimately dominate the market.”
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