Deloitte: Electric vehicle market growing, but financial benefits reducing

Commenting on the latest vehicle registration figures, Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, explained that while demand for electric vehicles continues, the benefits of transitioning are reducing.

“Demand for electric vehicles continues to remain strong, with volumes up 35 per cent compared to November 2021, and reaching a market share of 21 per cent. These figures reflect a market with greater selection of vehicles and improved battery range, and also mark growing consumer confidence in charging infrastructure – albeit there is still a long way to go. However, with fuel prices also remaining high, this will undoubtedly be a key consideration for those consumers considering a switch.”

“Consumers hoping to buy an EV will now also have to weigh up the additional Vehicle Excise Duty (VED) cost imposed in the Autumn Statement. From April 2025, owners of EVs will begin paying VED in the same way as traditional combustion engine vehicles owners do. The impact for cars costing below £40,000 should not be too material, at an extra £165 per year. However, the majority of EVs are currently priced at over the £40,000 price point, which means they will be liable for £165 VED plus the £355 expensive car supplement – resulting in an additional cost of £520 per annum. A not insignificant sum given the current economic climate.”

2015 electric vehicle (EV) research from Deloitte suggested ownership costs of battery EVs will match petrol and diesel vehicles in the UK by 2021. Depending on which way you look at it, we are not quite there yet, but there latest data shows how costs are shifting.