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Speed up the switch to electric vehicles to save lower income car owners thousands

Speed up the switch to electric vehicles to save lower income car owners thousands

A new report by the Green Alliance sets out plans to speed up the roll out of electric vehicles for lower income drivers | Alamy

3 min read

It feels like electric vehicles are in the news every day at the moment. The emphasis is usually on how they help to cut carbon emissions and air pollution. But one important fact about them that has not been highlighted enough is that they also cut the cost of car ownership considerably once they reach the used vehicle market, which is going to be a big benefit to those on lower incomes.

In fact, despite the current higher upfront cost of buying a battery electric vehicle, they are much cheaper to run and have lower maintenance costs than conventional cars. This is particularly significant once they hit the used car market, where running costs become the greater share of the total cost of having a car.

A new Green Alliance study has found that the total cost of owning a second-hand medium sized battery electric car will be between £700 and £2,300 less than it would be for its diesel or petrol equivalent. For third-hand, the savings are even higher, at up to £5,600 over the period of ownership. Those on lower incomes are more likely to buy used cars, so the benefits for harder up drivers will be greatest.

The question is how to speed up the market so these benefits can filter down sooner? In the way is the woefully tiny supply of electric vehicles reaching the used car market. Of the nearly seven million second- hand vehicles bought in the UK last year, only 0.3 per cent were battery electric cars. And, despite a recent surge in sales, new battery electric vehicles still only accounted for 6.6 per cent of new car sales in 2020. This leaves a very low prospect of more electric cars finding their way to the second-hand market anytime soon.

The government’s recent 2030 phase out date for petrol and diesel vehicles is a strong signal of the change that is coming. But, as the Public Accounts Committee highlighted last week, there isn’t yet a clear plan to make it happen, let alone make it happen fast enough to ensure clean vehicles make it onto the second-hand market soon and allow those on low incomes to reap the benefits of switching to electric.

Consumer incentives, as well as scaling up the roll out of charging infrastructure, can help to overcome some of the main reasons that are preventing people from choosing electric cars. But the pace of change also very much depends on having an adequate supply of electric vehicles and, for that, new regulation will be essential to get car makers to push up sales and make a wider variety of models available at more competitive prices.

The best way to propel us into the electric vehicle age is with a zero-emission vehicle mandate, or ZEV mandate. This is already used successfully in California, where it has helped the share of battery electric vehicle sales in the state reach over three times the US average. It would require manufacturers to sell a growing proportion of zero emission vehicles and hit interim sales targets between now and 2035. This would guarantee supply to speed up the transition and help bring costs down faster, as car makers compete for sales.

Importantly, a ZEV mandate should focus only on vehicles with zero tailpipe emissions, such as battery electric cars, rather than plug-in hybrids which don’t offer the same emissions reductions as battery electric cars and can be significantly more expensive to run if not charged regularly.

As highlighted in the prime minister’s Ten Point Plan for a Green Industrial Revolution, “zero-emission vehicles can be our most visible incarnation of our ability to simultaneously create jobs, strengthen British industry, cut emissions, and continue travelling”. A ZEV mandate would help to make that a reality sooner.

 

Caterina Brandmayr is head of climate policy at Green Alliance

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