News analysis


Retailing off? L


acklustre retail demand for EVs could still hamper the more buoyant fleet sector due to its effect on the used market, it has


been said.


BVRLA director of corporate affairs Toby Poston said the contrast between the strong incentives being offered for electric company cars, and a total absence of such incentives for private buyers, would cause a ‘negative loop’ affecting residual values. Speaking on a panel organised by communications agency Stand, on the subject ‘Are we on the cusp of a mobility tipping point?’, Poston explained: “When you look at the market, it’s a two-speed market. The market I’m in, business fleets, we’re already at about 70-80% of registrations being BEV. When you look at the retail market, it’s much, much lower, and that’s a problem.


“[The fleet market has] been pumped full of really strong tax incentives, and the retail market just doesn’t have [those].


Fleets have been warned they face potential issues caused by sluggish retail EV demand. Sean Keywood reports.


“The thing that worries me, is we’re fast approaching that first wave of electric company vehicles about to hit the used market, and that’s another retail market that has no incentives. It’s traditionally a market where people usually buy a car for £10-15k, that’s three years old – they are going to find that there is nothing that’s electric. “And that’s really going to imbalance the market with a real supply and demand scare, which will then feed back into the new market, because companies that rely on a healthy sale price for their used vehicles use that to set their residual values on the vehicles they’re providing into lease or rent. And they are going to have to be a lot more conservative, so there is going to be a negative loop.”


Another concern raised by Poston was the length of time it takes for new electricity grid connections to be put in to facilitate EV charging infrastructure. He said: “For grid infrastructure at sites when you are trying to get a new bit of


cable put in or a new transponder, I think the average is about 15 months to two years at the moment.


“If you look at the stage above that, where you are looking at actual network operators putting in infrastructure, the current lead time is about ten to 15 years. That’s the speed at which they are used to working.”


Fellow panellist, Raw Charging general manager Andy Gray, added: “One of the biggest challenges that we have is actually getting grid connections, the time that it takes, and the red tape we have to go through. It can take 100 days just to get permission or advice that we can connect to the grid in a particular location. “There’s a particular site we are looking at where there is a need, both for the local residents and also for businesses around there. The problem is it’s three years before they are going to do the reinforcement work, and the work will take another two – it’s five years, and there’s a need now.”


Poston did say that he thought a tipping point had been passed in two areas – acceptance of the need to decarbonise and move to zero-emission transport, and changing attitudes towards car use in cities. However, he said businesses attempting to plan for the future were still facing more uncertainty than they would like.


He said: “To make business decisions you need to know a bit about where you are headed and what you can spend your money on.


“If I could jump forward to 2030 and have a bit more information about what is the cost differential between EVs and ICE going to be, what is the grid going to look like, what is the UK automotive supply chain going to look like, where is battery technology going to be … that I think would unlock a faster, more coherent wave of investment and decision making, which at the moment people are just too nervous about doing.”


“To make business decisions you need to know a bit about where you are headed.”


www.businesscar.co.uk | August 2023 | 9


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