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It was disappointing, but perhaps not a surprise, that Personal Contract Hire (PCH) demand for Battery Electric Vehicles (BEVs) experienced something of a rollercoaster ride last year. Our own enquiry data saw a considerable fall in demand – down 33% compared to 2022 – with petrol being the most popular drivetrain holding just over 70% of total enquires.
Consumer demand for EVs slipped last year after a promising start. Multiple factors stunted BEV growth, to name just a few, the ongoing cost-of-living crisis, ongoing supply chain issues, higher price tags for EVs, negative media coverage regarding the roll-out of charging infrastructure, and confusion over the extension to the ban on the sale of petrol and diesel cars.
While year-on-year BEV demand was poor, a quarter-by-quarter comparison, however, showed more promise, and perhaps shows how any data needs to be taken with the proverbial pinch of salt: enquiries for BEVs in Q4 2022 compare to Q4 2023 showed an increase in demand of 44%.
The key reasons for the surge were renewed vehicle supply and the resulting discounting by some manufacturers ahead of the Zero Emissions Vehicle (ZEV) mandate coming into effect. Announced in September, the mandate requires more than a fifth (22%) of vehicles annually sold by manufacturers to be electric from 2024 onwards, with the threat of a £15,000 fine per unit for those that do not comply. This will place increasing pressure on manufacturers to push their BEV ranges and will be the most significant catalyst for the further uptake of EVs over the next 6 years. Manufacturers are expected to bring more affordable and accessible EVs to market to help further extend their popularity and mitigate potential penalties.
Within the leasing sector, Business Contract Hire (BCH) took the lion’s share of BEV registrations in 2023. Echoing SMMT fleet data, business drivers fuelled demand for EVs in 2023. Indeed, we saw a 46% increase for EVs year-on-year, while demand amongst business users for diesel vehicle fell by 22%, as businesses continue to lead the charge to an electric future.