Selling your car and the 2030 electric car switchover
In 2020, the UK government brought forward its ban on the sale of new petrol and diesel Internal Combustion Engine (ICE) cars and vans from 2040 to 2030. British Prime Minister Boris Johnson set out the ambitious new timescale as part of a 10-point plan to make the UK carbon-neutral by 2050. And so the concept of the ‘EV vehicle switchover’ by 2030 was born.
The Prime Minister’s decision to bring forward the deadline was reportedly made after taking soundings from scientists on the Committee on Climate Change, who suggested that, if the UK were to meet its own decarbonisation goals, then an outright ban on non-electric vehicles and hybrids needed to be implemented by 2032 at the latest.
However, following protests from car manufacturers who have to meet the tight deadline, the government relented and gave conventional hybrid models a ‘stay of execution’ until 2035. This is only if they are demonstrably capable of achieving a ‘significant’ zero-emission distance.
The new deadline sets a structural challenge for the UK and global automotive industry, as the vast majority of cars being produced and sold are still traditional petrol and diesel-powered vehicles. This is expected to change dramatically year on year, but in March 2021, only 7.7% of new cars sold in the UK were fully electric vehicles.
The Society of Motor Manufacturers and Traders (SMMT) have suggested that the 2030 ban could cause a fall in the number of UK car sales. According to their projection, the number of cars being sold would likely drop from a projected 2.3 million in 2025 to only about 800,000 following the introduction of the 2030 ban.
However, as the EU has now introduced stricter emissions rules, it has resulted in a rapid rise in sales in electric vehicles (EVs) across Europe, and this has seen manufacturers racing to design new zero-emission models. Consequently, EVs are becoming steadily more popular – but for now, the cost of manufacturing them still remains comparatively high versus diesel and electric.
In this ultimate guide to the selling your car and the 2030 electric switchover, we’ll look at the following:
- What does the 2030 EV switchover mean for drivers with ICE cars?
- What will the 2030 EV switchover mean for the price of diesel and petrol vehicles?
- Will electric car sales begin to dominate the new car market?
- How long before electric vehicles dominate the used car market?
- Is now the right time to sell your petrol or diesel ICE car?
What does the 2030 switchover mean for drivers with ICE cars?
With the 2030 electric switchover on the horizon, what will this mean for you if you have a car or van with a traditional petrol or diesel internal combustion engine?
Well, with the ban still the best part of a decade away, it probably won’t affect you too much in the short term – as the majority of drivers will buy a new vehicle at least once during this period. In any case, the ban is only concerned with the sale of new ICE cars – so, you will still be able to buy used petrol and diesel cars after 2030.
As the ban draws closer, automobile manufacturers will be concentrating on bringing more fully electric models to the market. This will mean a reduction in demand for petrol and diesel models; and prices on any unsold new petrol and diesel cars and vans will most likely drop.
It is also likely that – as switchover nears – there will be a range of new government directives, Public Relations campaigns, and incentive schemes brought in, in an effort to encourage drivers to choose electric.
What will the 2030 switchover mean for the price of diesel and petrol vehicles?
Though the 2030 ban only applies to the sale of brand-new ICE vehicles (which means you will still be able to buy and sell second-hand ICE and hybrid cars and vans), with the government supporting the use of EVs through incentives, the running costs of using petrol, diesel and hybrid cars are expected to increase – and these vehicles are likely to experience a corresponding decline in value.
This drop in value will be good news for first-time drivers looking to pick up a cheap run-around, but for those wishing to sell their ICE cars, they will find that they are subject to much steeper depreciation than normal – and, consequently, a poor return when selling.
Will electric car sales begin to dominate the new car market?
New electric vehicle sales in the UK will inevitably continue to rise exponentially over the next decade. In 2020, nearly a fifth of all cars registered (17.5%) were zero-emissions capable – up from just 7.4% the previous year. However, according to research by the British automotive services company RAC, the price of EVs is still a barrier for most people.
However, the cost of lithium-ion batteries – traditionally the most expensive components of electric vehicles – have seen a dramatic fall in price in recent years. Energy sector researchers Bloomberg New Energy Finance (BNEF) maintain that the drop in lithium-ion battery pack prices between 2010 and 2019 was a huge 87%.
If this trend continues, EVs should reach price parity with new ICE vehicles sometime between 2025 and 2029 – just ahead of the UK’s electric switchover. At this point, EV sales are expected to explode in volume as electrics become the cheaper new auto purchase option.
How long before electric vehicles dominate the used car market?
With the push towards cleaner, more sustainable energy becoming ever more urgent, and the EV technology rapidly developing and becoming more affordable each year, there is likely to be a dramatic shift away from traditional ICE motors before 2030.
Indeed, it seems that this change in consumer buying habits may have already occurred. Hit by Covid-19 restrictions in 2020, the UK automotive industry saw a corresponding slump in car sales. However, whilst overall sales figures were low, the number of EVs – and plug-in hybrids – actually saw a substantial increase. Indeed, plug-ins accounted for one in 10 of all cars sold in the UK last year.
Recent research published in the Journal of Applied Energy has also shown that electric cars are now cheaper to run than their ICE equivalents – and can outperform them too.
With the popularity, performance, and range of EVs and hybrids on the rise, and ICE cars and vans being phased out, it is likely that in the next decade, they will begin to not only dominate new car sales – but also flood into the second-hand market.
Whilst the used car market is some way off being dominated by EVs at present, the 2030 switchover – and, indeed, the drive towards it – is likely to present such a paradigm shift for UK drivers that it will trickle down to demand in the used car market exploding alongside new EV sales.
Is now the right time to sell your petrol or diesel ICE car?
Many automotive professionals have predicted that sales of ICE cars and vans have already peaked in the UK, so if you are looking to sell your current ICE car or van, then doing so now might make sense – as, despite the recently introduced emissions laws, there has so far been little substantive impact on used car values.
However, the price of petrol and diesel fuel tax is predicted to increase as EVs become more widespread. The tax, which has stayed at 58p per litre since 2011, is expected to rise in the near future as better fuel economy – and a sharp decline in new ICE vehicle sales – will mean a drop in revenue for the government. This means the amount of duty paid out by both petrol and diesel car owners when they refuel their cars will increase, regardless of the cost of the fuel itself.
The government’s ambitious decarbonising deadline, fast-tracked by a decade, set an immense challenge for many car manufacturers. As a consequence, the government has been forced to recognise the importance of hybrid technologies during the transition period and also been forced to commit to funding a number of consumer purchase incentives on EVs – a cost that they will no doubt recover by disincentivising use of ICE vehicles.
In the coming decades, as EVs come down in price and the running costs of ICE vehicles soar, the move towards an electric vehicle will become the natural choice for most drivers.
Whilst the situation will certainly change within the next decade, if you are thinking of selling your ICE car, there’s no urgent reason to go ahead today. However, as the country marches rapidly towards a greener future, if you are looking to sell your petrol or diesel car, it might be as well to switch over now – and get the best price for it whilst the ICE vehicle market remains buoyant.
Thinking of selling your car to buy electric?
Consider your car ownership and selling options with our handy guides and pages: