Used electric vehicle (EV) values could fall by a further 5-10% in the next few months, the latest Vehicle Remarketing Association (VRA) member meeting was told.
Giving a presentation on market trends for different fuel types, Dean Bowkett of Bowkett Consulting said there continued to be an imbalance between used EV supply and demand, despite recent dramatic falls in value.
“The one unbreakable rule of the used car sector is that you can’t buck supply and demand, and consumer interest in EVs remains muted against a backdrop of rising supply.
"We could soon be in a situation where for mainstream cars that are available with both petrol and electric drivetrains, the latter is marginally cheaper.”
The meeting also heard from Alastair Cassels of MHA on the three key issues facing motor manufacturers during the immediate future – the forthcoming zero emissions vehicle (ZEV) mandate, distribution costs and competition from new entrants.
“Government consultation on the ZEV mandate closes this week and, if it goes ahead as planned, could have huge implications for manufacturers selling cars in the UK, including some of the biggest mainstream names.
“It is possible that for those who don’t meet the mandate’s targets, fines of £15,000 per vehicle could be imposed, which is a dramatic figure.
"Car makers who don’t have sufficient EV representation in their ranges will be in very difficult positions and may have to do everything from buy credits from other manufacturers to strangling supply of petrol and diesel vehicles to balance their sales.”
Used EV prices a live debate
Rupert Pontin, vice chair at the VRA, added: “The future of EVs in the used car market is very much a live debate within our organisation.
"Indeed, there are those who believe that supply and demand are now balanced and can point to rising values for some models that appear to be underpriced.
"However, others believe that further falls in value will happen, and given the swingeing reductions seen over the last year, there is an extreme degree of caution in the market.
“We are very much aware of the role that the remarketing sector needs to play in terms of the process of electrification and, as an organisation, we, of course, back the move to EVs in environmental terms.
"However, as pointed out at the meeting, fighting the forces of supply and demand is tremendously difficult, and vehicle values are very much a dynamic outcome of those factors.”
The meeting was held at the premises of VRA members City Auction Group in Peterborough, and also featured Rob Severs of iVendi looking at the impact of the new Consumer Duty regulations on motor finance, while there was a panel discussion looking at data issues currently affecting the remarketing sector featuring Jonathan Hartley, sales and marketing director, Jepson; Jeremy Raggett, account director, Autotek21 and Mark Rose, managing director, Tracker.
Rupert added: “This was a really vibrant meeting that covered many subjects directly relevant to current remarketing trends.
"Our members are living through a time when our sector is perhaps seeing more change than at any point during their working lives and the VRA is playing a crucial role in helping businesses keep abreast of the latest developments, something that can be seen in our growing membership base.”