Inflation and soaring bills putting brakes on switch to electric vehicles in UK

Read More

A record number of drivers want their next car to be electric, but the cost of living crisis is forcing many to delay making the switch to a more eco-friendly vehicle.

The RAC said a record 14% of drivers say their next car will be electric, up from 10% last year and just 3% in 2018. A further 29% said they intended to switch to a hybrid vehicle of some description, which combines petrol and electric power.

“It’s great to see an increasing proportion of drivers saying they will go electric next time they change their vehicles, with more than twice as many saying their next vehicles will be zero-emission than before the pandemic,” said the RAC’s Simon Williams.

However, soaring inflation, rising energy bills and the prospect of higher remortgage payments has led to increased economic uncertainty, putting the brakes on drivers switching to a new, cleaner vehicle.

The proportion of drivers who now do not know when they will go electric has increased from 36% to 42% year on year, while those expecting to do so in the next five years has dropped from 17% to 15%. The proportion who think they will be in an electric vehicle over a 10-year horizon has dropped from 25% to 21%.

“The squeeze on household finances brought about by the cost of living crisis mean people keen to get into an EV are likely to put off doing so,” said Williams. “Rising interest rates will also inevitably have a detrimental effect on the number of people who choose to buy new cars on finance.”

The survey found that the comparatively cheaper cost of running an electric car, compared with the cost of conventional petrol and diesel vehicles since the war in Ukraine sent prices at pumps soaring, has replaced environmental concerns as the top reason for making the switch.

The RAC also said there had been a wider trend of a slowdown in vehicle switching since the onset of the pandemic, as well as a lack of availability of new vehicles due to the ongoing global shortage in semiconductors essential for running in-car computer systems.

In 2022, 28% of drivers said they intended to move to a different model within two years, down from 36% in 2019, before the pandemic. And 37% say they have no plans to change their car, up from a quarter in 2019.

Nevertheless, the RAC found that the popularity of petrol vehicles has hit a low with just 41% of drivers likely to choose one when they get their next car. This is down from 45% last year and 52% in 2018. Just 13% of drivers are set to buy a diesel-powered car as their next vehicle.

Last month, the UK reached the milestone of the millionth “plug-in” electric vehicle registration, although full battery-powered electric vehicles still only account for 17% of the market, according to the latest figures from the Society of Motor Manufacturers and Traders.

However, consumers continue to highlight a number of concerns about making the shift to EVs.

Issues raised include the lack of public charging stations and their reliability, as well as “range anxiety” over how far vehicles can travel on a single charge, and the rising cost of electricity.

“It’s very important to realise that for those who can afford to make the switch it’s still cheaper to drive electric,” said Williams.