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Interest in electric vehicles drops as energy costs rise

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
23/02/2023

The number of people looking to buy an electric vehicle has fallen as energy prices continue to rise.

One in five (22%) drivers said they are planning to buy a car in 2023, despite the cost-of-living crisis.

While this number is the same as last year, the preference of type of car has shifted, according to research from AA Cars.

In 2022, a quarter of drivers were looking to buy an electric vehicle. But the poll of 15,000 people has seen this number decline to less than a fifth (18%) in 2023 as energy costs soar.

However, while drivers may be put off by high electricity prices, AA Cars found that a majority are still committed to going electric, with 73% planning to buy one in the future.

But searches on its used car platform revealed that EVs accounted for 4.8% in the last three months of 2022, down from 11.2% in the same period a year earlier.

AA Cars suggested one reason for the decline in interest in EVs could be the steady fall in fuel prices just as household electricity prices are set to rise sharply in April as Government support is wound down.

Of those who are planning to buy a car this year, 82% said they will swap their existing petrol or diesel vehicle for another petrol or diesel model.

More than half (55%) plan to buy a used petrol or diesel vehicle as the strong price inflation throughout 2022 saw it slow towards the end of the year. But just over a quarter (27%) will be looking for a brand-new model.

Drivers are prioritising cars where they can get the most value for their money. A third of motorists said low running costs were one of the most important factors when choosing a vehicle, while 30% said they are looking for a car that will last them a long time.

Separate data from the Society of Motor Manufacturers and Traders (SMMT) showed that 13% of all new cars sold were EVs in January 2023, down from an average of 17% during the whole of 2022.

Further, limited availability of second-hand EVs meant they accounted for just 1% of used car sales last year.

‘Good time to look for a second-hand car’

Mark Oakley, director of AA Cars, said: “It is reassuring for the car industry that so many drivers intend to buy a car this year, though stretched household budgets are often leading people to make different purchasing decisions.

“AA Cars search data shows buyers are showing particular interest in smaller cars that are affordable to buy and cheap to run. This may also be behind the cooling appetite for EVs, as they typically cost more upfront than their petrol or diesel equivalents.

“With price inflation of the most popular used models levelling off, value is improving and this is a good time to start looking for a second-hand car.

“To ensure you are getting the best value and reliability when buying a used car this year, it is recommended that you get the vehicle inspected by an expert before parting with your money to check it is not likely to need imminent, and potentially costly, repairs.”

Related: Buying a used car? 10 checks that could save you thousands