Cap hpi warns of BEV dip
cap hpi has reported that there may be a reduction in consumer BEV registrations and a further rise in the value of used car values as a result of the cut to grants for electric cars and vans.
It believes a number of manufacturers may amend their EV new vehicle prices below the new £32,000 point to ensure they retain the incentive. However, some models may become more expensive as they react to the announcement, which leaves almost two thirds of cars previously eligible for the grant outside of current scope.
This latest announcement by the government on changes to the Plug-In Car Grant has prompted questions across the industry about the possible impact on used values for battery electric vehicles (BEVs). In connection with the previous change in March, cap hpi advised there was no used value impact expected because of the changes, as used values for most affected models were generally not close to list price or effective cost new after the grant was applied.
Therefore, decreases in new car prices were unlikely to put pressure on used car values.
This time, however, the changes come on the back of record-breaking rises in used car values through 2021 and although BEVs were slower to increase than internal combustion engine equivalents, three-year-old values are now up by 17.7% year over year. When the increases in used car values are combined with the effects of the supply issues impacting the delivery of new cars, used retail values for many electric vehicles are already close to, or even above, the new car purchase price.
Dylan Setterfield, head of forecast strategy at cap hpi, said: “In the short term, this is likely to accelerate a reduction in used electric vehicle values which were already expected, particularly once the new car supply situation eases and especially for those cars reduced below £32,000. However, it is important to note that it is unlikely to have an impact on the longer-term level of used BEV values.”
