Electric vehicle (EV) sales will continue their upward trend in 2023 as consumers embrace buying new EVs as a “virtual no-brainer.” Meanwhile, little evidence supports national newspapers' recent spate of “doom and gloom” stories about EVs. That’s according to market analysis by renewable energy specialist myenergi, featured in Cox Automotive’s quarterly automotive insight update AutoFocus.
According to Tom Callow, Head of External Affairs at myenergi, it is “clear to anyone who looks at the data that 2023 will be a great year for electric vehicles in the UK.” Running cost advantages, greater availability of used EVs in dealers’ forecourts, and the growing number of domestic solar installations are all among the principal factors making EVs attractive to buyers.
Philip Nothard, Insight and Strategy Director at Cox Automotive, said: “Between 2010 and 2022, approximately 1.1 million electric cars were registered in the UK, and it is forecasted that a further 1.1 million will be registered by the end of 2024, according to the SMMT. Despite being affected by supply constraints on wiring looms due to the global chip shortage and issues relating to the war in Ukraine, electric car registrations in 2022 increased by 21% from the previous year. Annual growth rates of around 30% are expected to continue for the next two years.”
Supply, not demand, is the only thing holding EVs back
The supply-and-demand landscape for EVs will likely be such that consumers will buy them as quickly as manufacturers can produce them. In AutoFocus, Callow states: “With 483,000 new electric cars expected to be registered in 2023 and perhaps as many as 200,000 used electric cars changing hands, we may see around 700,000 transactions of EVs this year. However, in a market of well over 7 million new and used car sales, that means that if any more than 10% of the car-buying market wants to go electric in 2023, the simple fact is that there will not be enough supply to go around.”
Amid this supply-constrained market, the used car parc is set to play a more critical role alongside new car sales, as Callow explained: “Going electric is a virtual no-brainer for new car buyers, especially company car drivers. Plenty of electric vehicles are available for the price of the UK’s average new car, and running costs for the vast majority of EV drivers will be lower thanks to a majority being able to rely on home charging.
“While it is still true that options are more limited for used car buyers, the picture is changing very quickly. This year should see a significant increase in the volume of electric cars hitting dealers and independent forecourts in the UK. This was made possible by impressive annual growth in new EV registrations in 2020 when the market grew by over 140% with more than 175,000 registered.”
Solar power leads naturally to EV adoption
While energy costs remain high, the other trend increasing EV sales forecasts is the widespread installation of solar panels across UK homes. “In 2022, we saw home solar sales more than triple compared to 2021, and we believe that trend will continue in the coming years,” Callow said. “Charging an electric vehicle at home is already invariably cheaper than charging on the public network, with recent research showing that petrol would need to fall below £1 per litre – something it has not done since 2009 – to make the average electric car more costly to run than an equivalent petrol variant. Domestic solar makes EV adoption even more of a no-brainer, with the marginal cost of charging being as low as zero when the sun is shining.”
Nothard concluded: “Despite recent headlines suggesting that car manufacturers are slowing down their production of electric vehicles, this seems counterintuitive given the projected demand for electric cars and the need for manufacturers to meet their fleet average emissions targets. However, the facts and forecasts are clear and indicate that electric vehicles will continue to thrive in 2023, though we must remain vigilant and not become complacent.”