The EV market is still in its relative infancy, but there have in reality been electric cars on the roads for a very long time. In fact, the first ‘electric car prototype’ dates back to the 1800s with a number of inventors laying claim to its creation. It was however, Thomas Parker, who is said to have created the first production electric car in 1884, in London.
It could be argued that ‘the electric car’ has taken a long time to catch on! But that is now changing as the EV market braces itself for a buoyant new era. Sales of new electric cars are now increasing at pace, and this uptake is now starting to make an impression in the used car market.
Electric vehicles made up 10.8% of new registrations in the UK in April 2022. But following in this shadow, is the growth of second-hand EV sales, which has been quietly creeping up as the popularity of electric vehicles gains ever-increasing momentum. In fact, the SMMT reports that sales of used Battery Electric Vehicles (BEVs) more than doubled from 6,625 to 14,586 from Q1 2021 to Q1 2022, an increase of 120.2% It’s a lively market, but there are a few factors driving it.
Despite new car registrations in the UK dropping by nearly 16% in April 2022, the market share for electric models continues to be healthy as an increasing number of drivers are making the change to BEV or PHEV cars.
Many of us are becoming more conscious about reducing carbon emissions, but while environmental concerns form an important part of the decision-making process, another catalyst for change is the sharp rise of petrol and diesel. Motorists are noticing a substantial difference in what they are paying at the pump, against a backdrop of rising inflation and increased cost of living. Company car tax (BiK – Benefit in Kind) is also playing its part. For 2022-23, company car tax is 2% for a fully-electric, zero-emission car and remains frozen until 2025, considerably less than petrol or diesel which could be as much as 37%. This makes electric cars an enticing proposition for business users.
Congestion charges in low-emission zones are another factor for business and private drivers. There are low-emission zones, now covering most of Greater London, and also applicable to Brighton, Norwich, Oxford, Nottingham, Leeds, Birmingham and Glasgow, with the prospect of ultra-low emission zones in some areas.
Many drivers are giving more consideration to the power source of their next car, from both a environmental and economical perspective. It is driving the popularity of EVs in all categories, from small low budget cars, to premium high-performance electric sportscars.
These general factors are of course influencing change. But, with the supply chain being in turmoil, with global shortages, due to the pandemic and world events, car manufacturers are also facing huge production and delivery challenges. This is fuelling the used car market, and with it, a record first quarter for used BEVS. Plug-in hybrids (PHEVS) and hybrids apparently also “changed hands in greater numbers than the year before rising by 35.3% (14,433 units) and 28.8% (35,007 units) respectively.”
While this all sounds very encouraging for the used EV market, SMMT also stresses that, “the growth in new EVs over the past two years has yet to have significant impact on the overall market.”
Mike Hawes, SMMT Chief Executive, said: “With the new car market hampered by ongoing global supply chain shortages, growth in the used car market is welcome, if unsurprising especially given we were in lockdown last year.”
He continues by adding: “Electric car sales are energising the market, with zero emission vehicles starting to filter through in larger numbers to consumers looking forward to driving the latest and greenest vehicles. Although there is some way to go before we see the recent growth in new EVs replicated in the used market, a buoyant new car market will be vital to help drive fleet renewal which is essential to the delivery of carbon savings.”
It is a trend that is being mirrored in the demand for electric car insurance, which isn’t always easy to find. However, motor insurance companies are having to take the demand and requirements for EV insurance seriously, although there is still a reluctance from some when it comes to insuring BEVs and PHEVs. New battery technology is expensive. The potential flammability risks and lifespan of power batteries (including the cost of replacement batteries) have made some motor insurance companies hesitant in providing cover.
EV insurance specialist, Novo, has a very different perspective. Novo has experienced a 262% increase in electric car insurance enquiries from Q1 2021 – Q2 2022.
“We are experiencing a considerable increase in demand for electric vehicle insurance and have recently added some 40 new premium vehicles to our courtesy fleet of EVs to cater for our clients’ needs. We pride ourselves on being able to guarantee a like-for-like EV replacement loan vehicle if the policy holder’s vehicle is involved in an incident,” says James Allenby, Founder and Director, Novo Insurance. The company also provides a comprehensive Accident Management Service for private and corporate clients.
James adds, “EV insurance is a rather different proposition to traditional motor insurance with electric battery powered vehicles carrying greater potential financial responsibility to the underwriters. As brokers, we provide a fully-managed ‘concierge style’ service, with the flexibility and specialist knowledge to offer clients a tailored EV insurance solution with high levels of cover. Novo has extensive experience in what remains a niche market segment, with many connections with insurers and approved EV repairers. Combined, this positions us well to offer the very best customer experience.”
For further information about electric car insurance and accident management solutions, please contact Novo ….