Drivers will benefit from an electric car price war this year, according to new analysis.
Prices in the UK will fall due to competition from China and established manufacturers competing for market share amid new Government targets, a report by online vehicle marketplace Auto Trader said.
The analysis predicted that Chinese brands will capture a sixth of the UK’s new electric car sales by 2030 as they turn their sights overseas after conquering their domestic market.
Interest in Chinese manufacturers such as BYD and GWM is growing in the UK, and the companies have room to take on established brands by cutting prices, the report stated.
Auto Trader said the BYD Dolphin is on sale in the UK with a starting price of £25,000 compared with £13,000 in China, while the GWM ORA 03 is on sale for £31,000 in the UK but just £12,000 in China.
The report expects the Government’s introduction of a zero-emission vehicles (ZEV) mandate at the start of January will also put downward pressure on prices.
The policy means at least 22% of new cars sold by each manufacturer in the UK this year must be zero-emission, which generally means battery electric vehicles.
The threshold will rise annually until it reaches 100% by 2035.
Manufacturers that fail to abide by the rule or make use of flexibilities – such as carrying over allowances from previous years – will be required to pay the Government £15,000 per polluting vehicle sold above the limits.
In September last year, Prime Minister Rishi Sunak delayed the ban on the sale of new petrol and diesel cars and vans in the UK from 2030 to 2035.
Auto Trader commercial director Ian Plummer said: “Drivers considering taking the first step on their electrified driving journey have never been in a better position to benefit from falling electric vehicle prices than in 2024.
“Even though the PM has pushed back the ban on sales of new petrol and diesel cars until 2035, the introduction of the ZEV mandate means that manufacturers are still under pressure to sell more electric cars and to do that, they’ll need to compete on price.
“The rise of China in electric cars will only add to that pricing pressure as they have the firepower to grab UK market share.
“To really ignite mass adoption of electric cars, the Government should consider a fairer approach by equalising VAT on public and private charging as well as reducing VAT on second-hand electric cars.”
Steve Gooding, director of motoring research charity, the RAC Foundation, said: “This coming year needs to be a good one for sales of electric vehicles or else car companies will fail to meet their mandatory zero-emission sales targets and the country is going to falter in its drive to switch to green motoring.
“At the end of 2023, there were just shy of one million pure battery electric cars in the UK.
“This sounds a lot but needs to be seen in the context of the nation’s overall car fleet which numbers nearer 33 million.
“The road to reducing the environmental impact of driving is a long one.”