How is the rise in electric vehicles impacting motor traders?

The last few years have been tough for car sales. The effects of the pandemic, major shortages of components and supply chain issues have all led to car ownership falling for the second year in a row. But data from the Society of Motor Manufacturers and Traders (SMMT) proves that the number of electric vehicles (EVs) is on the rise – with nearly 750,000 plug-in vehicles now on the roads. So what does that mean for motor traders like car dealers and mechanics? Let’s take a look.

Why the rise in EVs?

Electric vehicles are seen by many as the future of transport. Government targets to hit net zero and improve air quality mean more people are looking to make the switch to electric, while car manufacturers are producing more and more electric and plug-in hybrid models to choose from. And you can’t deny that EVs come with benefits, including:

• Cheaper running costs

While all prices just seem to be getting higher these days, electric vehicles are still more economical to run than petrol and diesel motors. Add to this the fact they generally need less servicing and maintenance, they are usually exempt from congestion charges and vehicle tax is either low or not needed at all – and you can see how they represent a saving overall.

• Better for the environment

Pure EVs don’t emit any exhaust gases, which make them kinder to the planet and lowers air pollution in congested areas. That’s why they’re seen as the future of greener travel and why the government has plans to stop the sale of new petrol and diesel cars after 2030. Buyers who are looking ahead are choosing to switch to electric now.

• Business benefits

In the first quarter of 2022, there was a drop of nearly 180,000 corporate registrations of diesel vehicles and an uptick in EV registrations, with nearly 60% of all electric cars on the road registered to a company. This is in part because the business incentives to switch are currently more attractive, with the current Benefit in Kind rate for electric cars capped at just 2% until 2025.

What does it mean for motor traders?

The gradual but definite shift towards electric vehicles is making itself felt in different parts of the motor trade. For car dealers, it naturally means selling more electric vehicles, which could prompt a change in long-term strategy. And for mechanics it means a change in both skills and demand. Let’s take a closer look.

A skill gap is looming

Data from Auto Trader suggests alternative fuel vehicles (AFVs) will make up over 12 million (37%) of the total car parc by 2030 and 9 million of those will be pure EV. And while the Institute of Motor Industry (IMI) has released figures showing the number of technicians qualified to work safely on electric vehicles has risen to around 15% in the UK – with a rapid rise in the first half of 2022 alone – there’s still an EV skills gap expected to happen by 2027. This is when the number of approved mechanics to carry out services, repairs and MOTs on EVs won’t be enough to cover the number of EVs in need of them.

New opportunities

Whichever part of the motor trade you work in, understanding the expected acceleration in the adoption of EVs could be beneficial to your businesses. Garages and dealerships can work this into sales strategies – both to push sales of EVs but also to adapt how you approach selling petrol and diesel cars too.

If you’re a mechanic, the expected skill gap on the horizon could mean that training to add an EV technician qualification to your roster of skills is a good move – helping you stay ahead of the curve as numbers of EVs continue to climb. Preparing your business now means you could be in a stronger position in future.

Making the switch  

Of course it’s not just the vehicles you’re working on that may change – it’s how you choose to run your business. You may want to consider switching to using electric vans or vehicles to carry out your line of work, so you can enjoy some of the benefits for yourself, such as lower running costs.

Plus, as more EVs are produced, the technology is improving – with longer range and better battery life options, as well as higher numbers of charging stations, making it easier to top up your EV than before.

The cost of insurance is starting to come down too, as more data available on EVs makes it easier for insurers to assess the risk and price the premium accurately.

Check your motor trade insurance

While the landscape of fuel and electric vehicles changes, one thing you’ll need stays the same – your motor trade insurance.