The United Kingdom is going through a cost of living crisis like we haven’t seen for many years. Probably the worst since before some of my readers were even born.
How has this current financial situation affected sales of electric vehicles? And has there been a particular detriment to the sales of electric cars and electric vans?
I will try to keep this as light hearted as possible. There is good news at the end though, so read on.
Where the Issues All Began
There have been so many problems which have led to the current cost of living crisis that it is difficult to even know where to begin. However, I shall give it a good old fashioned British try.
As with many current problems, the cost of living crisis can be traced back at least to the height of the pandemic when the world went into the dreaded lockdowns. Businesses shut down, people stopped driving to work, so less fuel and energy was used as a result.
Energy companies took a big hit when the lockdown was in progress. What happened when the lockdowns came to an end is where the spiral truly began.
The Rise of Fuel Prices – The Boom of Electric Vehicles
To try and keep customers coming to the fuel forecourts, oil companies slashed the price of fuel. Less demand meant lower prices. However, when the world started to return to normal, the price of fuel went up… and up, and up.
The rising prices caused a panic amongst petrol and diesel vehicle drivers. More and more people flooded the petrol stations to fill up with fuel at as low a cost as possible. This led to fuel shortages on the forecourts due to not being able to keep up with demand. The increase in demand in turn led to fuel prices increasing at an ever quicker rate.
It truly was a time when the vicious spiral of circumstance got out of control and was exacerbated by the greed of petrol and diesel suppliers. Chaos reigned.
This period of time, however, was the beginning of a major boom for electric vehicles. The price of electricity was still incredibly low at the time. Therefore, more people wanted to make the switch to electric vehicles to avoid the madness of the fuelling stations. Here at EVision we found demand shot through the roof.
Just When You Think Things Can’t Get Worse – War Breaks Out
Early 2022 saw the second panic at the fuel pumps in just a few months. However, things were about to get worse. In February 2022 the Russians invaded Ukraine and opened up a whole new can of global crisis worms.
Russia, it turns out, is a major producer of oil and are a significant supplier of gas and oil to numerous European countries, including Germany, Hungary, Italy and, to a much lesser extent, the United Kingdom.
The rightful global outrage against Russian aggression in the East meant that a serious response was required from other nations across the globe. Sanctions after sanctions were rolled out, including sanctions on Russian energy supply. Sanctions that would be reciprocated by the Russians themselves.
These sanctions inevitably led to fuel prices increasing globally. The shockwaves would be felt by millions.
However, at this point, electricity prices were still largely unaffected in the UK, so electric vehicles were looking better all the time.
Early Figures on Sales of Electric Vehicles Stun Everyone
March of each year is an important month when analysing car sales. It is a month when new number plate registrations are released and accounts for around 20% of all annual sales.
With all the problems encountered by drivers of traditionally fuelled cars in the previous few months, it was not really much of a surprise to find out that sales of those cars suffered 14.3% year-on-year reduction in sales. Quite a significant figure. It was also revealed that only 5% of all new car sales were for diesel vehicles.
Electric vehicles, on the other hand, found this to be a golden period. March 2022 proved to be the best month of record for electric vehicles. Not only was there a 78.7% year-on-year increase over sales in March 2021, there were more electric vehicles sold in the month of March 2022 than were sold in the whole of 2019. This really highlights how quick the ascent of electric vehicles has been.
The Cost of Living Crisis Bites Harder – But Electric Vehicles Thrive
Just when you think things cannot get any worse, they do. A rise in the energy price cap came into force, with further relaxing of the price cap planned in the near future. This was another hit on finances at home. So how would this affect the electric vehicle market?
Well, it seems that sales are still going incredibly strongly. At the time of writing, sales for 2022 to date are up 101.9% year-on-year when compared to the same period in 2021.
Considering that the supply of electric vehicles has been a major issue in recent times, this is an astonishing performance. You just know that when supply resumes normal service, apparently in 2024, that electric vehicles are almost certain to leave petrol and diesel cars in the dust.
It isn’t just cars that are leading the way in the electric vehicles revolution. Electric vans have also seen strong sales. There were 27,000 electric vans on the road by the end of August 2022. 2021 saw an unbelievable growth of 240% of electric vans from the year before. Longer range and more variety have really helped the market hugely in recent times.