By on September 3, 2020

Today’s study comes straight from the memoirs of Captain Obvious. Apparently, an economic recession isn’t what you want when you’re vying to sell factory fresh automobiles beyond the confines of rock-bottom prices. There might even be a correlation between being broke and lacking the ability to purchase items in general. At least, that was the takeaway from a cutting-edge assessment recently conducted by Auto Trader in the United Kingdom.

In an attempt to keep tabs on the public’s level of interest in reference to electric vehicles, the outlet has been surveying people at semi-regular intervals. Back in January, it asked 2,300 consumers ‘waddya buying,’ only to learn that 17 percent had their hearts set on a battery electric vehicle. That’s impressive considering less than 10 percent of automobiles in the UK utilize electricity for propulsion and most of those happen to be hybrid models. But the trend toward BEVs has shifted rather dramatically since the COVID pandemic took hold.

A follow-up questionnaire from August (this time with 2,700 respondents) shows demand has waned immensely. Only 4 percent of respondents said they were planning on getting themselves a battery electric vehicle.

While the obvious explanation has everything to with the financial fallout stemming from pandemic-related lockdowns, some amount of faith seems to have been shaken in the usefulness of EVs specifically. People are going to be less likely to purchase a new vehicle as the economic situation worsens, but electrics seem to be taking a larger hit.

“At a time of economic uncertainty car buyers are reverting to the type of vehicles they are more familiar with, and what they consider to be the most affordable choice, namely petrol and diesel cars,” The Financial Times’ quoted Ian Plummer, Auto Trader’s commercial director, as saying. “Since cost is the primary consideration for most car buyers, the upfront retail price of EVs [electric vehicles] is somewhat off-putting.”

The prevailing assumption among “experts” is that electric vehicles are easier on the pocketbook on a longer timeline, making it look as though these customers are playing themselves. But we’re inclined to believe it’s more complicated than that. While EVs are cheaper to run (so long as electricity remains more affordable than gasoline), they’re usually priced several thousand dollars higher than their internal-combustion equivalents. Initial maintenance costs are also significantly lower (depending on your warranty) on EVs, but swapping in a new battery much further down the line will be an extremely expensive item. Then we have depreciation, which currently has electrics losing their value at higher rates  though this is frequently offset by environmental subsidies designed to spur adoption rates.

All told, that makes it seem as if consumers aren’t just factoring “familiarity” into their purchasing decisions. They know that electric affordability is highly conditional. Combine that with EVs being slightly less practical when utilized as a household’s only vehicle and it’s not surprising they’d second guess themselves in a time of crisis.

However, the survey seems to indicate the biggest issue isn’t looking at the big picture, but the upfront cost of buying an electric car. Nearly half of the respondents opting against an EV in August said their personal finances wouldn’t allow for the initial expense. One-fifth claimed they were simply concerned with spending money while the economy looked so sickly.

The Society of Motor Manufacturers and Traders has reported that electric vehicle sales have continued to rise through 2020, though. FT cited the organization as confirming 40,000 new EV sales in the UK between January and July versus roughly 14,000 sales in the same period from 2019. Unfortunately, deprecation has accelerated, with used models seeing prices drop by 5.2 percent in August.

“Over the past year, consumer demand has outweighed supply,” Plummer explained. “However, since the emergence of COVID-19, we have seen this trend reverse; whilst supply levels have remained relatively constant, consumer demand has eased, which has been a contributing factor to over six months of consecutive year-on-year price decline for hybrid and electric cars.”

Meanwhile, the pandemic has caused general vehicle pricing to spike in North America. Following production stoppages and a total lack of demand from earlier in the year, the automotive industry claims it’s struggling to meet demand as supply chains normalize. People are also shunning public transportation in large numbers, fearful that they may be infected by the Wuhan Wheeze, La Rona, The Coof, etc.  which is also believed to be ramping up demand unexpectedly.

[Image: nrqemi/Shutterstock]

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12 Comments on “Study: Global Recession Negatively Impacting EV Sales (Duh)...”

  • avatar
    SCE to AUX

    “There might even be a correlation between being broke and lacking the ability to purchase items in general.”

    This is always true, but the report is based upon the UK economy, which doesn’t have the F-150 or Tesla phenomenon. Americans still seem to afford these things.

    “Then we have depreciation, which currently has electrics losing their value at higher rates”

    This problem applies to everyone but Tesla, it seems.

    • 0 avatar

      May be Americans can afford Tesla and F150, but Brits have free healthcare. Their cities are not burnt down, they have law and order and functioning police, people are not afraid to be beaten up or killed on streets during day and night. Their mayors do not join forces with criminals to hurt law abiding citizens and violate property rights.

      • 0 avatar

        Sounds like Utopia! Is that where you live? Somehow, Great Britain ruled a good part of the world at one time. I wonder what happened?

        • 0 avatar
          Arthur Dailey

          It fought the Germans twice. For a total of 10 years. Twice as long as the USA. And the USA ensured that Britain paid its loands/debts in full while forgiving those of other nations.

          Prior to 1918 the Brits were the largest investors in the NYSE, owned the majority of US railway stock and had the largest merchant fleet in the world. They sold their investments to Americans to pay for their war debts and lost most of their merchant fleet during the course of two wars.

          That is what happened. The lack of historical knowledge/perspective among so many Americans is truly a demonstration of a dysfunctional academic system.

          • 0 avatar
            Art Vandelay

            So it’s all our fault because we wouldn’t forgive their debt? They could have just surrendered to the Germans and avoided accruing it. Curious, given these trying times, will nation’s like China be forgiving our debt as you seem to imply is the decent thing to do?

          • 0 avatar
            Arthur Dailey

            The USA forgave the debt accrued by France, the Soviets and then Marshall Plan and rebuilding aid given to many other nations including Germany, Italy and Japan.

            But old school American diplomats still viewed Britain as their main global rival and needed to bankrupt Britain in order to ensure that its empire fell.

            With the Brits out of the way the US could then move into its previous colonies. Many of which were used to be dictated to/controlled by English speaking ‘overlords’.

            Hence American influence in the Middle East, parts of Africa, dominance of the Canadian economy etc.

            The Brits as late as the Nixon administration went to the USA and asked for assistance maintaining their fleet and military base in Aden. The US government decided that rather than spending the money on military assistance to the Brits that they would instead divert that money, and more to the Shah of Iran who would then protect American interests.

            We all know how well that didn’t work out.

          • 0 avatar
            Art Vandelay

            So what? They borrowed the money. Giving money to everyone else doesn’t change that. Maybe we let it go with France because of the what would today be billions of dollars of assistance they spent so we could be a country in the first place. It is the prerogative of the lender if they choose to forgive some debt and why. Maybe if after WWI the allies had listened to some of those American Diplomats that whole mess could have ended in a manner that did not involve Germans embracing Hitler and repeating the whole mess in a few years.

            And again, if the Brits didn’t find the terms of Lend/Lease favorable, they were free to negotiate with the Germans. Maybe Chamberlain could have gotten Hitler’s signature on some more papers.

            Of course I don’t believe that would have been a good idea, but I find your efforts to make the US out to be the bad guys in this period as a stretch at best and an incredible oversimplification of the post war period.

          • 0 avatar
            Art Vandelay

            “It fought the Germans twice. For a total of 10 years.”

            Yes, they fought them because the Germans attacked them. We also fought the Germans because the Germans attacked them and did so in a manner that put off us defeating the nation that did attack us for many years. But yeah, bad guys because they made them pay back the money they borrowed.

          • 0 avatar

            US intentionally did everything to weaken and collapse British Empire to take over control over seas and establish world domination. US did not share nuclear weapon secrets with GB even though GB started working on nuclear weapons before USA and shared findings with Americans on condition that British scientists will participate in Manhattan project. Britain did not have resources to develop nuclear weapons alone. British Empire already started to collapse and Americans facilitated this process as much as they could during and after war, e.g. the 1956 Suez Crisis. Note that GB intentionally destroyed aircraft industry opening market to US companies (again GB become too small and had limited resources to pursue advanced R&D).

  • avatar

    Might have something to do with the 20% DECREASE in 2nd quarter 2020 GDP in Britain. Much worse economy there than in U.S. or E.U.

  • avatar
    Arthur Dailey

    For those who believe that EVs and in particular Teslas are purchased because they are green, please re-evaluate.

    Teslas are purchased for their status/perceived prestige. Their performance is a side benefit.

    From an article printed today by the company that owns this site:
    ‘Speaking of Tesla, this year, the car has taken over Muskoka. So, I heard from more than one close car-watcher. Where, last year, there were only a couple to be seen, it is now the car of choice for those who might still have a $290,000 Tige Wakeboard …. Everywhere from Bush’s Watersports Park to the local plumbing store, you will see Tesla-dedicated chargers for those sneaking up in electrical silence.

    A big Bloomberg story that announced that Muskoka was now the world’s second-fastest growing recreational real estate market after Côte d’Azur, France.’

  • avatar
    Brett Woods

    FYI this has the hallmarks of an industry hit piece. A type of commercial propaganda. It has been circulated and re-printed widely. It misrepresents the study and suggests the opposite of what Q1 and Q2 2020 sales data shows.

    Sadly, not “by Matt Posky,” but no hard feelings – monetizing of content and all that. I haven’t found yet who did write it.

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