Supporting the Electric Vehicle Market
【Summary】Car manufacturers and their captive lenders need to find ways to support the growing electric vehicle (EV) market and overcome buyer objections, according to iVendi. Factors such as high prices, a delay in the EV production deadline to 2035, and rapidly rising insurance premiums are causing potential buyers to lose confidence. iVendi suggests creating more confidence in EVs by supporting future residual values to reduce PCP costs and offering fixed-cost insurance cover.
Car manufacturers and their captive lenders are facing challenges in supporting the new electric vehicle (EV) sector, according to iVendi. The company highlights that high prices, the delay of the EV production deadline to 2035, and rising insurance premiums are causing potential buyers to lose confidence in the market. James Tew, CEO, explains that despite the government's postponement, the market still needs to electrify quickly. The confusion and uncertainty surrounding EVs, coupled with the increasing insurance costs, are leading some buyers to reconsider their plans to purchase an EV.
iVendi emphasizes the need for manufacturers and lenders to create more confidence in electric cars. With a large number of EVs set to arrive in the next few years, they suggest that discounting may not be the best approach, as it may give the impression that the new technology is being dumped on the market. Instead, they propose supporting the future residual value to reduce PCP costs. Promoting leasing products and addressing consumer mindset around risk and reward could also help increase adoption. Additionally, iVendi suggests looking at captive insurers to offer fixed cost cover for the first two years of the lease to address insurance concerns.
James Tew believes that the new car market will continue to electrify rapidly over the next decade, driven by the EV mandate set by the government. Car makers are required to sell a proportion of EVs, with penalties for not meeting the targets. As a result, the supply of petrol and diesel vehicles will decrease significantly, and by the late 2020s, new car supply will be predominantly electric. Therefore, building confidence in the EV market is crucial, as there is no alternative to making electrification work. Increased acceptance in the new market will also benefit the used market, although this will take time.
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