The BBC is confronting the possibility that the once promising surge in sales of EVs is going flat. Naturally, this is starting to cause a panic because all those pesky climate targets enshrined in law aren’t going to be met. Range anxiety and costs are the two most serious obstacles.
Only cheap EVs will plug the gap but the tidal wave of lower-cost Chinese imports will wreck domestic manufacturers, and the only solution to that on the table is tariffs. Here’s the story:
Buoyant electric car sales are a must if we’re to hit our climate targets. But EV sales in the West are down and if governments want them to recover it may have to be at the expense of their own economies.
By 2035, the International Energy Agency (IEA) says there will need to be 790 million EVs if we’re to hit Net Zero by the middle of the century.
That implies growth in sales of 27% every single year.
China’s largest EV manufacturer BYD has been vying with Tesla for the number-one spot. BYD also saw a slowdown between January and March.
And EV sales in Europe fell more than 10% year-on-year in the final quarter of last year – although in the U.K. total sales are running up on last year.
That’s why the fact that global sales of the world’s largest EV maker, Tesla, were actually lower in the first quarter of 2024 than in the same period in 2023 has raised eyebrows.
In the U.K., analysts say strong EV sales in recent years were fuelled by company car purchases, thanks to generous tax breaks.
But the household market is proving a tougher nut to crack, with people saying they are mostly put off by the high cost. The average price of a new EV in the US is over $60,000 (£47,433). Prices are similarly high in Europe and the U.K.
Large state subsidies and greater production efficiencies mean the average cost to a Chinese consumer is just $30,000. And BYD’s Seagull hatchback sells for less than $10,000.
China is also making massively more EVs than its domestic market needs – it could easily flood the U.S. and European markets with cheap cars if they weren’t held back by tariffs.
Here is the dilemma for European and U.S. politicians. They want cheaper EVs to facilitate the climate transition, but not at the cost of undermining their own car manufacturers – the likes of Ford and Volkswagen – and local jobs.
In fact, the talk is actually of raising tariffs and other trade barriers on imports to keep out ultra-competitive Chinese EVs.
That’s precisely what U.S. President Joe Biden did this week with a new 100% tariff on Chinese EV imports.
Apparently, the hope is that second hand sales will expand the use of EVs. But as any reader of this website knows, the unlikely prospect of there being any secondhand market in EVs at all is a whole other story. EVs are set to be one-owner commodities, like a washing machine or vacuum cleaner.
If prices of new EVs stay where they are then there is a rocky road ahead:
If that happens, expect that tension between the desire of Western governments to decarbonise transport and their desire to protect domestic manufacturing champions to grow even more acute.
At some stage they might be forced to choose.
Well, who could possibly have anticipated that? Worth reading in full.
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I have heard about people buying old Renault Zoe’s for a local run around. I do expect there to be a large second hand market as ex-lease cars are sold to avoid the cost of scrappage.
But where are they then? The only people I know with ev’s are company car drivers. Add in the high cost of new batteries for older cars and there is no hope.
My son’s got a BMW hybrid company car, for tax purposes. He runs it almost entirely on petrol.
Autotrader has 514 Renault Zoes starting with one at £2,000 for an 10/11 year old car with nearly 60,000 miles on the clock – call it 6,000 miles/year. It’s had 5+ owners – I wonder why they keep selling it on? The advert says the battery is leased – I’m not sure of the cost implications of that.
I wouldn’t touch it.
Renault used to have a deal that the battery was leased, with the car being owned by the purchaser. There must be continuous lease fee for that, followed by replacement work eventually. The advert probably doesn’t say that you would be buying a contract to pay xyz per month indefinitely!
Anyone who uses a sentence with the words “climate targets” in it needs to be put on a purpose built prison ship for a mandatory ten years.
How can anyone disagree?
I feel I have to keep banging this drum:
Vauxhall Corsa is available in petrol and battery electric versions.
Other manufacturers who offer BEV and ICE versions of their cars show a similar or worse disparity in price.
Some manufacturers conceal the huge disparity in costs by making their BEV cars apparently completely new models, thus avoiding such direct price comparisons. Doing so doesn’t fix the huge costs associated with BEVs but makes it seem less obvious.
The differences in costs (£8,390 for the ‘Yes’ trim level or £10,180 for the ‘Design’ in the examples above) must be recouped during the initial purchaser’s ownership of the vehicle through one or more of the following routes:
Anecdotal evidence suggests that, on the down-side, insurance costs are far higher for BEVs but that on the up-side a BEV can cost £1,000 less per 10,000 miles in energy costs. Recently we have heard that road tax will in future be levied on new BEVs – though, no doubt, at a lower rate than for ICE cars. I’ve no information on comparative maintenance costs. It seems well established that the second-hand market for BEVs is struggling.
At a price differential of £10,000 for a small car, recouping the cost difference through energy costs at £1,000 for every 10,000 miles driven means keeping the car until it has done 100,000 miles – at 10,000 miles per year that’s 10 years. Most new car owners do not keep them for 100,000 miles / 10 years.
It seems the only way BEVs can be the right choice for anyone is through Green evangelism or Hobson’s Choice (ie nothing else available).
Even energy costs are not necessarily cheaper for BEV, depending on the unit prices at the location of any charging facility. In round numbers, Those at fuel trader sites are broadly the same as petrol, if you take account of typical thermal efficiency & content of E10 fuel, and that they use full on VAT away from domestic premises (where it is 5%). You are right to conclude that for lower mileage owners, depreciation is the highest proportion.
I was being ‘generous’. No, I don’t actually believe that most BEV owners can save £1,000 / year on energy vs petrol.
That pretty much leaves Green evangelism as the ‘benefit’ for a BEV first owner. Corporates can maybe afford such ‘virtue’ signalling, but most individuals can’t. Those few individuals who do choose to afford a new BEV are probably rich enough to go for the top end of the market which will skew the second-hand market still further.
This report from the (biased) Nickel Institute (used in EV batteries) suggests TCO is generally lower for BEVs vs ICE, but mentions “subsidies” and “incentives” can make up to 20% difference: nickelinstitute.org/en/about-nickel-and-its-applications/nickel-in-batteries/total-cost-of-ownership-tco-for-electric-vehicles-ev-vs-internal-combustion-engine-vehicles-ice/
As long as there are subsidies available to encourage BEV use, paid for by us, any TCO comparison is difficult.
Many thanks for the link. I’m amused the article starts with a lie:
Good point about the subsidies. I should have put that in my bullet points and ‘up-side’ paragraph above.
Maybe next time
A company car driver saves about £700/month on their personal benefit in kind tax bill. That £700 is paid by the rest of us.
Another amusing dilemma is that Mercedes, VW & BMW sell huge quantities of cars in China. 80% of VWs & BMWs sales in China are Chinese made, so only 20% made in German factories. The opposite for Mercedes, 80% of their exports to China come from Germany. Whack a tariff on the Chinese & it’s curtains for Mercedes.
And then, as if by magic, the Telegraph is running a story today that the Chinese have just developed an EV battery that will give you 600 miles range with just a 10 minute charge!
Leaving aside the practical grid issues that would be caused by that amount of power surging down every domestic street of an evening, this does seem a very timely development for all those potential customers with “range” issues.
I saw that headline and immediately thought “BBC / Reuters garbage”. Both monitor the news and then release stock, ready-to-go “news” to suit the prevailing narrative.
And you believe the Chinese?
I have watched you-tube videos of people actually trying to live with an EV, even for people who understand the technology and have a smart-phone with all the right ‘apps’, it seems to be a nightmare to try and charge the car away from a home charger. Many of these charging points seem to deduct money (£40-£50) before you even start charging, if the charging fails you have to wait some time before you hopefully get your money back.
If the charging does work you have to hang around for a while waiting for the car to charge. This is not the freedom of the road motoring dream of Easy Rider or Thelma & Louise. If you have young children or elderly relatives in the car it is a nightmare. I do not have and cannot use a smart-phone I struggle with much of this new digital technology, if I had to have an EV it would be for local utility trips only and charging the car at home.
I think that for many people this is the best that EVs can offer, local utility trips. Petrol/Diesel cars could realistically offer the dream of the open road, touring holidays and the freedom to travel to virtually wherever you wished. EVs will for ordinary folk, at best, offer a trip to Sainsbury’s or the Doctors, they are not the stuff of dreams.
Electric Vehicles have had a good tradition of delivering milk to households, early in the morning.
What the BBC has not been able to come to tems with this week is Geert Wilders forming a new Dutch government. Buried well away from the Beeb’s front page, and of course always accompanied by the words ‘far right’…
Their plan isn’t to replace all petrol and diesel cars with EV’s. It is to make motoring unaffordable for all except the elites so the plebs are off the roads.
One of the reasons for sales being fairly buoyant in the UK is because of Salary Sacrifice deals. My daughter in law is a Sister at a Hospital and she got an EV, insured, all servicing etc. for around £290 a month. It was less than she was paying out before on her petrol car. How it is so low I have no idea.
How many years on the lease/purchase agreement?
Sorry to keep using Vauxhall Corsa as the example but:
FINANCE EXAMPLE
Personal Contract Purchase
Model
Corsa Electric YES 5dr 136PS Auto
Paint
Brilliant Paint
59 monthly payments of £250.99
Electric Bonus £3,800.00
On-the-road cash price £26,895
Vauxhall deposit contribution £840
Customer deposit £2,000
Total amount of credit £20,255.00
Interest charges £2,002.18
Total amount payable £24,257.19
Optional final payment (GFV) £7,449
Fixed rate of interest per year, true 2.86%
Annual mileage 6,000
Excess mileage charge, per mile £0.09
Duration of agreement (months) 60
APR% Representative 2.90%
FINANCE EXAMPLE
Personal Contract Purchase
Model
Corsa YES 1.2 Turbo (100PS)
Paint
Brilliant Paint
47 monthly payments of £271.60
On-the-road cash price including customer saving £18,505.00
Vauxhall deposit contribution £0
Customer deposit £2,000
Total amount of credit £16,505.00
Interest charges £4,264.08
Total amount payable £22,769.08
Optional final payment (GFV) £8,004.00
Fixed rate of interest per year, true 8.56%
Annual mileage 6.000
Excess mileage charge, per mile £0.10
Duration of agreement (months) 48
APR% 8.9%
Note the finance scheme APR% is heavily skewed (BEV 2.86%, Petrol 8.56%) – who’s subsidising the BEV or penalising the ICE?. It’s a 5 year deal for the BEV, 4 years for the ICE yet the final payment is roughly the same – despite the cash price being £8k different. There’s an apparent electric bonus of £3,800 right upfront – who pays for that?
The increasingly ludicrous West talking about tariffs on China really does show how dumb they are. Which country has cornered the market on disgustingly dirty, non-Green, non-recyclable materials mined by 8-9 year old children? Exactly.
So, what happens to the Western car market? They will have to pay even more extortion money to China and make their own industries even more uncompetitive. The only winners will be China.
What is it with Western leaders that they all have intelligence which pales into insignificance when compared to a dead single cell amoeba?
The Intelligencia believe that intelligence is a substitute for knowledge and experience.
And when it comes to STTEMM subjects, Science, Technology, Theology, Engineering, Mathematics and Medicine, it’s the knowledge and experience that counts, and Intelligence helps.
So Arts, Humanities and Social Science graduates are lost, unless they have a brother, sister, parent, or ‘best friend’ that can gently update them on their predicament if they want to do Politics.
If a factory makes some electric cars, do all the jobs count as green jobs.
Not only the jobs in the factory. The jobs in their entire supply chain including the jobs in the bank or finance company which keeps the business running,
But because Net Zero is the law, we will just see more mandates, subsidies and bribes to get us all out of the petrol and diesel. Remember that with everything GREEN, first comes the nudge, then comes the push. If we don’t all voluntarily get a smart meter, an electric car and a heat pump then out will come the big stick. But just as with all the turbines it is us that will pay for it all.
Yes, it starts with a nudge; then a shove and finally a kick.
But it’s quite enjoyable being a member of the Awkward Squad ….. and forcing them to move through the shove and onto the kick stage so that no-one can be unaware of their authoritarian tendencies.
I love the image heading this article.
Surely that’s a good thing as it means nobody else is using it? It means I can plug an EV in and charge it up.
Alas. No, that’s not what it means. It should perhaps say:
‘Out of order’ or perhaps ‘nobody made it worth it for us to turn it on’.
“Buoyant electric car sales are a must if we’re to hit our climate targets”. What a load of nonsense, where is the evidence that buying electric cars will change the climate?
EV’s are the Betamax of the automotive industry. Thankfully it will destroy the Chinese economy.
EV dis-incentives:
High initial cost
Inability to charge at home
Scarcity of public re-charging points outside of cities and large towns
Recharge times = wasted time/journey time increase
Range anxiety
Tendency to explode in a fireball
High insurance costs
Non-existent second-hand market
Very expensive battery replacement costs
When they’ve solved all of those, I’ll think about it.
Meantime, I intend replacing my small, fuel-efficient, cheap to run Hyundai i10 with another one in 2 years time ….. and, at 5000 miles a year, it should keep going for many more years.