Sales of new battery electric vehicles (BEVs) may have hit a record in the UK, but their sustained success relies upon a vibrant used BEV market, where work is needed.

Growing uptake of new BEVs is dependent on a vibrant used BEV market

Richard Jones, former MD of Lex Autolease and now head of MotoNovo Finance, says concerted action is required to encourage greater adoption of used BEVs and has called on the Government to take a lead.

He’s highlighted that increased demand will be healthy for both the new and used BEV markets – even if that means switching some of the current support for new cars to the used car sector.

His comments come after latest figures from the Society of Motor Manufacturers and Traders (SMMT) revealed that one battery electric car was registered every 60 seconds in July as deliveries surged 87.9%, taking a 16.0% market share. For the first seven months of 2023, BEV registrations were up 38.0% and rose to a 16.1% market share.

But according to Jones, used BEVs accounted for just 1.7% of the market in Q2 and supply has been exceeding demand, leading to falling used EV values for much of the year.

“Used BEV supply is set to increase significantly in the coming months, and so action is needed to encourage consumers to switch to used BEVs. Some of this is educational, but I believe support is also needed from government agencies to bridge the financial gap with comparable ICE vehicles, as well as help to fund home chargers.

“Arguably, it is time to start switching existing EV support incentives from business users and fleets to used BEV consumer buyers to help create a more sustainable used BEV market.”

The MotoNovo Finance MD is also calling for dealer partners such as lenders, remarketing suppliers, value-added product partners and parts suppliers to help the used retailer community to guide consumers through the different user processes and perceived challenges of switching to a BEV, such as vehicle charging and range issues.

But he stressed that financial support for used BEV buyers could help embed BEVs more rapidly on the road to net zero.

“Sustaining the upward trajectory of new BEV sales means we need to have a vibrant used BEV market as well. There is a symbiotic relationship that cannot be understated. Strong used values, centred on consumer demand, equate to more confidence in setting residual values, creating a virtuous circle that is mutually beneficial for new and used car markets. These markets need to create greater consumer demand for BEVs. Now that new BEVs are gaining market maturity, switching financial support to the used BEV sector is a progressive solution to embed a sustainable new and used BEV sales model.”

Cox Automotive has also recently called for government intervention and industry knowledge sharing to help counter volatile used electric vehicle prices and inform buyers on the benefits of going electric.

Its Q2 AutoFocus insight update said the number of used BEVs entering the market was outstripping the development of supporting infrastructure and also warned of cautionary buying behaviour from both used car retailers and consumers.

But Cox said falling values and uncertain demand could be eased by offering incentives and discounts for those planning to buy a used BEV, stimulating the market.

And insight and strategy director Philip Nothard said there was an opportunity for the UK government to follow the example of countries such as France, Germany, the Netherlands, and the US – where ownership makes more financial sense in comparison.