With petrol and diesel prices soaring switching to lower cost EV motoring in 2022 must make more sense than ever right?
Unfortunately 2022 hasn’t been shaping up that way. Costs of buying and charging an EV (Electric Vehicle) have been rising sharply. A combination of chip shortages, COVID shutdowns in China affecting Tesla and Russia’s war in Ukraine (affecting VW group) have disrupted car production generally and the supply of EV’s in particular.
We love electric cars but if you want to make switch from a petrol, diesel or hybrid you may need to hold on till 2023
Why hold off?
- Well demand for electric cars was already massively outstripping supply before these challenges, partly because many carmakers misjudged how quickly consumers would stop buying petrol diesel and hybrid cars and switch to EV’s.
- In addition China and South Korea which supply many of the batteries and cars (Inc Polestar 2 and UK Model 3 and Y, Niro EV, EV6 & Ioniq 5) have strong demand in their own local markets cutting how much they export
- Prices are rising sharply for new and used electric cars (they were meant to be falling) and the economics or switching to electric vehicles are, at least temporarily getting worse not better than a couple of years ago
- UK Government OZEV grants for new electric cars which had already been cut from £5,000 to £1,500 since 2019. Now EV UK grants for cars have now been abolished altogether
- Most EV’s are imported into the UK and since Brexit this is more expensive and the pound has fallen increasing prices in pounds
- Many carmakers have already sold out of all their EV production for 2022 in the UK – so if you order today most models won’t now be delivered till 2023
- Limited supply means most carmakers that were offering discounts to sell EV’s in 2021 have stopped doing so in 2022
- Carmakers faced with delivery times of over year have also stopped taking orders for cheaper models. For example the smaller battery Skoda Enyaq 60 has been pulled in the UK, which means the Enyaq starting price has risen from around £33,000 (after grant) to £41,000, between December 2121 and May 2022, a 24% rise in 6 months
It’s worth bearing in mind these delays affect piston cars and greenwashing hybrid models as well..It is just a bit more acute for electric cars because that’s where the demand is going.
The drawbridge goes up for 2022 buyers
The effect is that buyers who bought a VW ID.3 in the £25-30k price point last year will struggle to find one for under £35k in 2022. even the Fiat 500 in 2022 is only available in small battery form for under £25k. Indeed the “under £25k) segment has pretty much disappeared as electric cars have moved up £5k to £8k in a year. While supply is so limited this makes little difference to deliveries right now, essentially 2022 is a year when EV buyers who could have just afforded an EV at last years prices found “the drawbridge has been pulled up” and EV’s are now out of reach.
We have to hope this is temporary, as new models that might have been affordable are also being launched at higher price points. It does look like MG with the ZS, MG5 (just being upgraded) and later in the year the promising MG4 hatchback will dominate the £25k-£35k family car space in the meantime along with Peugeot, Citroen & Vauxhall hatchbacks.
More on those price rises
While new electric car starting prices have risen sharply some of those increases do include extra equipment and a better spec. Just a few examples
- MG5 and MG ZS EV’s are now mainly being sold as longer range versions with a real world range EV Database range of 225 miles for the ZS (or 273 miles WLTP)
- Other cars are actually down or stable in price like the Citroen e-C4, Vauxhall Corsa-e and Peugeot e-208 starting at just under £30k at the time of writing. All have slightly longer range than the earlier models thanks to a heat pump now included as standard along with other efficiency improvements
- The base Tesla Model 3 has risen amongst the fastest now starting ( at time of writing) at £48,490. This Model has improved with bigger and different new batteries (updated in December 2021) that can be charged daily to 100% rather than 80% giving longer usable range. Tesla prices currently just reflect a very long 1 year delivery time which may start to fall by the start of 2023 as new factories in Germany, Texas and China increase production sharply. Tesla could drop prices if and when delivery times begin to normalise.
There are new electric cars on the way that were due to bring in competition and extra supply but many will arrive at higher prices in 2022 than had been originally expected and their arrival may be delayed as well
Interesting new Models like the
- Chinese Ora Cat – Fun quirky looks, small boot, slow charging
was due to launch at around £25k but now starting at just over £30k and delayed
- Renault Megan – attractive good to drive family crossover which could be a big seller
Due to launch at around £30k but now launching at £36k
- Smart #1 . – price still to be announced but looks promising as long as prices aren’t too silly
Give me some good news! The new MG 4
Just when it looked like 2022 would just be about EVs becoming less affordable along comes our new top pick MG 4 hatchback. Great to drive with a fresh all new design and platform, this VW ID.4 competitor starts at just over £25k and under £29k gets you an SE long range with 285 miles WLTP range. MG could have chosen to play along with it’s competition, instead its shaking things up. An ID.3 for the price of a Fiat 500
The electric car transition is happening. Despite the frustration of the supply problems these will ease, prices of electric cars and charging will fall and the cars are getting better all the time. Only 1% of electric car owners want to go back a piston model for their next car – click to see why they are so much better to drive.
Not only that self driving cars in fleets will sooner than you think deliver cheaper travel by car than we have ever seen and open up travel to all.
The key is not to get frustrated and buy another new piston or hybrid. Buy one used if you must but otherwise hang on, or make a reservation for an EV for 2023 that has free or low cost cancellation so if prices fall you can switch. Also don’t forget if you employer offers salary sacrifice or a company car then an electric car lease cost will be slashed compared to a fossil fuel vehicle.
Car clubs and long term rental companies can usually get you into an EV within weeks.. at a price
Second hand prices have risen for all cars but especially for electric cars. Good news if you own one as some can be resold for close to their new price after 2 or 3 years but this should change after supply improves and offer improved value in the future.