The ban on the sale of new petrol and electric models from 2030 has been called “a seismic step” for car buyers. So far in 2020, only 9 per cent of the new cars bought in the UK have been electric (EV) or plug-in hybrid electric vehicles (PHEVs); that gives the Government nine years to change the purchasing habits of 90 per cent of the new-car buying population.
But what does it mean today? Should anyone buying a new car only consider electric? And what will happen to values of petrol and diesel models? We answer the important questions.
If you buy a new car now, should it be electric?
Not necessarily. If petrol (or diesel) suits your lifestyle, mileage and budget, buy that. At midnight on 31 December 2029, service stations won’t just put up the closed sign and begin ripping out all their pumps to replace them with electric vehicle (EV) charging points. Neither will garages stop servicing internal combustion-engined cars.
Will my petrol or diesel car be worthless?
No. The ban is on sales of new petrol and diesel models from 2030. The legislation doesn’t apply to the sale of used cars. But what happens to the used value of petrol and diesel models depends on how the intervening nine years pan out. There are two broad scenarios: the transition to EVs goes smoothly. Or it doesn’t.
Petrol or diesel cars could plummet in value if…
The government offers increased grants or tax breaks to EV buyers. The number of new charging points might also have accelerated significantly. To help pay for this, the treasury could hike duty on petrol and diesel fuel or bump up car tax (or its successor) for combustion engine drivers.
In this case, drivers will convert quickly to electric cars and there will be increasing numbers of electric cars on the used market. Demand for supposed smelly, expensive and inconvenient petrol and diesel models will decline, people will happily switch to used EVs and values of second-hand petrol/diesel models will fall.
Petrol or diesel car values could rocket if…
The Government’s ramping up of electric car charging points doesn’t happen as quickly or extensively as it needs to. Some public EV charging points currently cost up to nine times more to use than home chargers. If that continues, using EVs may be viewed as unreliable and expensive. That might be emphasised if grants incentivising drivers to switch to electric cars aren’t sufficient.
If this is the EV ownership reality, petrol and diesel models will remain popular with buyers and the take-up of electric cars slow. Demand for used combustion engine models will remain high but supply will nonetheless decline as manufacturers switch to selling only EVs. The result will see the price of used models rising.
Is it foolish or morally wrong to buy petrol/diesel over the next 10 years?
Neither. There is nothing more immoral about buying petrol or diesel than buying electric. An EV may have no tailpipe exhaust emissions but it’s still built in factories using, in most cases, the same energy and resources as internal combustion cars. It still has to be transported across the world using a (probably diesel-powered) ship and/or car transporter. And at the end of its life, it still has to be broken down and where possible recycled.
During its lifetime, the EV will need to be charged and it’s worth remembering that around two thirds (64.2 per cent) of the UK’s power still isn’t from renewable sources. All cars wear out our roads. And EVs are responsible for just as many emissions in the form of particles from brake dust and tyres.
None of that is denying the undeniable: petrol and diesel cars do produce harmful exhaust emissions. But the modern combustion engine is a marvel of efficiency. And while some might vilify diesel drivers as child killers, the latest Euro 6 diesel engines produce only minuscule amounts of harmful nitrogen oxides.
Why are hybrids suddenly reprieved?
Originally, any car using a combustion engine was to be banned, including hybrids. Now the government says new hybrids that can “drive a significant distance with no carbon coming out of the tailpipe” will be allowed on sale until 2035.
What quantifies as “a significant distance” is anybody’s guess. Presumably it doesn’t mean self-charging hybrids that can only travel a mile or two on battery power alone.
The move was taken because plug-in hybrids which can usually cover around 20 electric-only miles per charge are viewed as a glide path: an easy transition to electric motoring while some of the charging challenges are resolved.
The Society of Motor Manufacturers and Traders (SMMT) chief executive Mike Hawes welcomed the move: “We are pleased to see the government accept the importance of hybrid transition technologies - which drivers are already embracing, as they deliver carbon savings now.”
Is there such a thing as a cheap electric car?
New electric cars have hefty sticker prices: the cheapest Vauxhall Corsa-e is £26,640. Buy that on Personal Contract Purchase (PCP) finance and it’ll cost a more palatable £325 a month, with a £2,600 deposit. However, that same deposit and monthly payment will buy a petrol version of the larger, comfier Astra…
It’s hardly surprising that SMMT chief executive Mike Hawes said: “Success will depend on reassuring consumers that they can afford these new technologies.” Some car makers currently complain that they lose money on electric models so don’t expect prices of new models to fall overnight without Government incentives.
Buy used and you can pick up a battery-powered 2013 Nissan Leaf for slightly less than £8,000. The same money will buy a similar age VW Golf GT or GTI depending on mileage. Sadly for buyers, electric vehicles are no longer the massive depreciators they once were. Values now hold up as well, if not better than, combustion-engined equivalents.
Depending on how the next nine years goes, that could increase the lifespan of petrol or diesel models for longer than the government intends.
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