What’s happening with the price of EVs and what it means for you?
The great thing about EVs is that the technology and market are evolving all the time, and overall the trend is positive - more manufacturers, more cars, better tech - though as we all know, progress isn’t always in a straight line.
As an EV specialist, we’re committed to three things:
- Being ahead of the game - on the pulse of what’s happening in the market
- Being affordable - making EVs as accessible to everyone as possible
- Being sustainable - making decisions that mean we can deliver our mission over the long term, not just the short term
Sometimes that means prices will go down, though not always.
In fact right now, while some of our prices are going down, some are going up for good reasons, and we’re here to tell you why.
What factors can influence our prices?
Let’s start first with a bit of background on the sort of things that influence how we set our prices
1. How much we buy the car for
At the end of the day, we buy the car and lease it to you, whether through our Salary Sacrifice Scheme, Personal Leasing or Business Contract Hire. The better deal we get, the more savings we can pass on to you. And because we represent thousands of you, and we’re an EV specialist, we can negotiate some great deals on your behalf.
2. How much the car is worth at the end of the lease
This is where the term Residual Value comes into play. Residual value is the estimated worth of a vehicle at the end of its lease term. It can fluctuate based on tech advancements, supply, demand, and current market conditions.
If a car is expected to lose its value quickly, lease prices will increase (to cover the cost of depreciation). If the car is expected to hold its value, lease prices will be lower.
This is the other side of the coin to point one - if EV prices are coming down that’s good news, but if used EV prices are falling faster, then monthly lease prices will increase.
3. Interest rates
This one’s quite simple, as the interest rate increases, so do the monthly lease payments, as they need to accommodate the increased borrowing costs.
4. Supply and demand
Supply and demand have a big impact on pricing and, in particular, the supply of EVs has changed significantly recently, from not enough supply (post-covid) to plenty of supply more recently.
So, how are current market trends influencing our prices?
There’s a few things happening in the world of EVs right now that are influencing our prices:
How does the ZEV mandate influence our prices?
The ZEV mandate became Law in Great Britain on 3rd January 2024. It requires all new cars and vans to be zero emission by 2035. It also requires 22% of new car sales to be Battery Electric Vehicles (BEVs) by the end of the year, or face hefty fines. As the ZEV mandate comes into force we’re seeing the prices of new vehicles come down.
How does the influx of EV manufacturers influence our prices?
There’s some brilliant affordable EVs coming on the market from many manufacturers, examples include BYD and Dacia. Not only are these cars high quality and affordable in themselves, but the increased supply means the end to the “scarcity premiums” we saw in the post-covid era as demand for EVs shot up, but there weren’t enough cars to go around.
What’s happening to used EV prices?
Right now, used EV prices are dropping as both the price of new EVs comes down, and the supply of used EVs increases. In general, this is great news - we need a large number of affordable used EVs to really drive the electric revolution.
However, it can also mean some new EVs are worth less after 3-4 years of a lease (lower residual values as we call it), than they would previously which means some of our prices will increase, to cover the cost of depreciation. This is probably the most significant trend we’re seeing in the market right now.
What should you do if you’re thinking of getting an EV now?
Overall, there’s still no better time to get an EV than now. Prices are coming down, infrastructure is improving and the tax benefits of a Salary Sacrifice scheme make it a fantastic option. There are also still some great deals to be had.
We’ll always be working towards getting the best prices possible, despite some market ups and downs..
We’ll also honour prices that you get through our quote tool for 21 days from the day of the quote, so if you’ve had a quote in the last 3 weeks, it’s still valid. (T&Cs apply).
