Supporting the EV Market: Encouraging Collaboration between Manufacturers and Lenders
【Summary】Car manufacturers and their captive lenders need to find ways to support the new electric vehicle (EV) sector to overcome growing buyer objections, says iVendi. Factors such as high prices, delayed production deadlines, and rising insurance premiums are causing some potential buyers to lose confidence in the market. Manufacturers and lenders must create more confidence in electric cars through measures such as supporting future residual value and promoting leasing products.
Car manufacturers and their captive lenders are facing challenges in supporting the new electric vehicle (EV) sector, according to iVendi. The company states that factors such as high prices, the postponement of the EV production deadline to 2035, and rising insurance premiums are causing potential buyers to lose confidence in the market. CEO James Tew explains that while the government's decision to delay the deadline may lead to confusion and uncertainty, the market still needs to electrify quickly. He also highlights the issue of rising insurance premiums, which are making EV ownership cost-prohibitive for some.
Tew believes that with a large number of EVs set to enter the market in the coming years, it is crucial to build confidence in electric cars. He suggests that manufacturers and their captive lenders have a role to play in achieving this. Tew also discusses the need to find ways to reduce the cost of EVs without resorting to discounting, which could damage the perception of the technology. He suggests supporting the future residual value of EVs to reduce Personal Contract Purchase (PCP) costs. Tew also highlights the potential of promoting leasing products and addressing insurance concerns through captive insurers.
Tew emphasizes the importance of the EV mandate, which sets targets for the proportion of EVs that carmakers can sell in the UK. He states that the targets are ambitious and failure to meet them can result in fines. Tew predicts that the supply of petrol and diesel vehicles will decrease rapidly, and by the late 2020s, new car supply will be predominantly electric. Therefore, building confidence in the EV market is crucial. Tew concludes that increased acceptance in the new market will also benefit the used market, but acknowledges that it will take time to achieve.
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