Government support crucial to stimulating used BEV sales

Growth in the new BEV market has been underpinned by benefit-in-kind (BIK) incentives available to fleets and business users. While some private ‘buyers’ have been able to benefit from such incentives under salary sacrifice schemes and, to a limited level, have been able to access a nearly new, used BEV, provided it has previously been leased under a BIK scheme, many private buyers do not have access to such employee benefit schemes.

That is why MotoNovo Finance is continuing to call on the government to introduce support for used BEV buyers that is not limited to employer benefit schemes. The business’ latest consumer research on the emerging used electric vehicle market, involving 2,000 UK adults, supports this levelling-up call.

While the price gap between ICE cars and BEVs has closed in the newer used car market sector, the average advertised price for a used EV was reported recently as £27,607 – significantly higher than for petrol or diesel alternatives.

However, according to MotoNovo Finance’s research, with the type of government financial help that has seen new BEV sales grow dramatically, many more used car buyers would choose to buy one.

When asked, “To what extent would a government financial grant/incentive, such as a scrappage scheme, encourage you to switch to a used battery electric vehicle rather than a petrol or diesel car?” over half of people said it would make a difference and a third of these people said it would make a ‘big’ difference.

Reflecting on the research, MotoNovo Finance’s Commercial Director Debbie McKay observes: “Looking ahead, the supply of used BEVs will increase significantly, mirroring the growth in the new car market over the last three years. Encouraging more consumers to choose a used BEV is crucial. The road to net zero needs a strong used BEV market because of the symbiotic relationship between used BEV values and new BEV monthly payments for leasing and PCP agreements. Sustainability in both will help deliver the environmental benefits sought.”

McKay believes that while price parity between BEVs and ICE cars will emerge in the future, there is some way to go right now, something which could be damaging to the fledgling used BEV market.

As has been seen in the new BEV market, she believes government support can help bridge the gap until price parity becomes realistic. McKay concludes: “We want to see the government provide an incentive or grant to encourage more consumers to switch to new or used BEVs. It cannot be right that government support is only available to a section of the population.”