Electric Car Prices to Fall Further as Sales Targets Loom
Vertu Motors, a leading UK car dealership chain, anticipates continued price cuts on electric vehicles (EVs) in 2025 due to stringent government sales mandates. The company warns that the "zero emission vehicle mandate" (ZEV), which mandates that automakers sell 28% of their vehicles as EVs in 2025, is causing "increasing pressure" on dealerships as profit margins dwindle.
With EVs still being significantly more expensive than fuel-powered cars, manufacturers are forced to resort to price reductions to boost sales. As a result, consumers have benefited from substantial discounts, averaging over £10,000 per vehicle.
Vertu cautions that the ZEV mandate is squeezing dealership profit margins and forcing companies to implement cost-cutting measures, including job cuts and branch closures. CEO Robert Forrester states: "The Government's ZEV Mandate is causing severe disruption to the UK new car market, and the consumer environment is subdued."
Car manufacturers have expressed concerns that the targets are unrealistic and urged the government to reconsider. Despite these concerns, the government remains steadfast in its commitment to the mandate, offering potential concessions around scheme flexibilities.
EV proponents argue that billions of pounds have been invested in the industry based on the ZEV mandate's targets. The government emphasizes its support for the automotive sector's transition to electric vehicles, with plans to install 300,000 charging points by 2030.