Price pressures on EVs hit Hedin Mobility in Q1

Hedin Mobility took a hit in the first quarter largely n the back of reduced operational earnings as margins fell in used EVs.

It said some European counties had dropped EV subsidies and carmakers had responded with price cuts, leading to reduced margins in the used car market.

The company turned a loss of SEK231m (-£17m) in the three months to march on sales up 32% to SEK23585m £1.7bn

Hedin Mobility CEO Anders Hedin (pictured) said the quarter had been characterised by “caution”.

“The considerable and relatively rapid increase in the interest rates has resulted in a decline in the order intake over the past year.

“At the same time, several European countries have reduced or completely removed the subsidies for electric vehicles.

“This has resulted in a decrease in the demand for electric vehicles, and several manufacturers have sharply reduced the prices to stimulate demand.

“This has in turn affected the market value of used electric vehicles and sold vehicles with a repurchase commitment, such as private leasing. This price pressure has affected the margins in the used vehicle market, which is the main reason for the decrease in operational earnings within retail.”

Hedin said he was expecting a gradual improvement in the economy as lower interest rates impacted the market.

“There are clear signals that the interest rates will be decreased during the year and we see positive development in sales compared to previous year for comparable units.

“With expectations of decreased interest rate combined with lower inflation forecasts, we are optimistic about a gradual improvement in economic activity and demand during the second half of the year.”

Hedin operates dealerships in 12 European markets, including the UK where he has Mercedes-Benz and BMW and MINI businesses. The company had tabled an unsuccessful bid for Pendragon in 2023.