Private demand for electric vehicles (EVs) has been declining, as evidenced by recent data from the Society of Motor Manufacturers and Traders (SMMT), prompting concerns about the affordability of transitioning to EVs among car owners.
Sales to private buyers dropped 7.7% in April and another 2% in May according to SMMT figures. This decline has sparked discussions about the necessity of government incentives and raised doubts about British automakers’ ability to meet zero-emission vehicle (ZEV) mandates.
However, experts argue that the SMMT’s data doesn’t accurately reflect the situation, as it fails to account for sales through salary sacrifice schemes. These schemes allow employees to lease EVs at lower costs by deducting monthly payments from their salaries. Despite being popular among consumers, these purchases are categorized as fleet or business acquisitions, skewing the perception of private demand.
Fiona Howarth, CEO of Octopus Electric Vehicles, highlights this discrepancy, emphasizing that salary sacrifice cars are used for personal purposes like the school run and family trips, yet they are not counted as part of private demand. Octopus Electric Vehicles alone delivers around a thousand cars monthly, indicating a significant market presence.
Additionally, other forms of private acquisition, such as private leasing and flexible financing options, may also be misclassified as fleet purchases. Used EVs previously owned by fleets and now in private hands are also excluded from consideration.
Despite claims of dwindling private demand, Ben Nelmes, CEO of New AutoMotive, dismisses this notion as a “myth based on flawed data.” He emphasizes that EV sales are at record highs, driven by their environmental and cost-saving benefits.
Quentin Wilson, a motoring journalist and founder of FairchargeUK, underscores the need for accurate end-user data to understand the true distribution between private and fleet purchases. SMMT’s CEO, Mike Hawes, acknowledges this gap and expresses intentions to collaborate with relevant authorities to address it.
In conclusion, while fiscal incentives like salary sacrifice schemes have spurred EV uptake, they are not universally available. Further measures are necessary, especially for private consumers, to achieve shared net zero ambitions.
