Government electric car grants jeopardise RVs, says CAP
Entitled “Impact of government subsidies for electric vehicles on used market values”, the report analysed the used market performance of the Nissan LEAF in the UK, Germany, France and Italy to compare values in countries with and without a purchase incentive subsidy.
The research identified a direct correlation between stronger used values in Germany and Italy – where there are no plug-in car grants – and weaker values in the UK and France, where new car purchases are subsidised by the government. It also found that France, as the country with the highest subsidy, also sees the lowest used values for the LEAF.
The report also says that the eventual and inevitable removal of such grants will cost new EV owners thousands in additional depreciation, as the used value has already been established in each market and the additional cost of a new vehicle will never be retained by a higher residual value.
Report author Mark Norman said: ‘As it stands, 12-month depreciation levels in the UK already amount to almost half the subsidised new price for a Nissan LEAF. Without the original £5,000 subsidy, total 12 months’ depreciation over the first year would amount to over £17,000. With average depreciation for a comparable specification diesel Volkswagen Golf or Ford Focus currently standing at around £7,000, this would make the economic argument for buying the LEAF all but impossible to make even with the potential fuel cost savings.’
The report argues that government investment to encourage take-up of ultra-low emission vehicles would be better directed in future toward supporting provision of “in life benefits”, such as “green badge” parking schemes, permission to use bus and multi-occupancy lanes and exemption from many city centre driving restrictions, as already successfully deployed in Norway.