Aggressive financial incentives of £8,000 on volume-selling EVs could signal the beginning of brutal discounting as UK automotive brands attempt to speed up the switch to electric, in line with one automotive industry veteran.
Tony Whitehorn, former UK CEO and president of South Korean manufacturer Hyundai, said carmakers were facing quite a few pressures within the electrification of the UK vehicle parc – and that in consequence, there have been bargains available to buyers.
Addressing delegates during a recent e-learning webinar, Whitehorn explained that automotive manufacturers operating within the UK face hefty fines under the Government’s ZEV mandate in the event that they fail to hit certain targets in respect of electrical vehicle sales, so must encourage more people to purchase them.
Customers, alternatively, are delay by the upper prices of EVs so are reluctant to make the switch.
This, in turn, implies that manufacturers must offer substantial discounts to spice up demand – even when that results in margin erosion as EVs are costlier to provide than conventionally-powered alternatives.
Whitehorn said: ‘Automobile manufacturers will not be making as much money out of EVs as they’re out of vehicles with internal combustion engines. But they’ve got to sell a complete load more battery electric vehicles to avoid paying hefty fines.
‘Due to this fact, there are going to be big discounts and a number of incentives to tempt people to buy them. Already I’m seeing numerous 0% finance offers, with huge financial deposit allowances – as much as £8,000 on one volume-selling vehicle, which surprised me.’
He added that one of the best ways for manufacturers to sell larger numbers of discounted cars could be to profit from digital retailing, ‘That’s how you’ll be able to change someone from being a tyre-kicker to a contracted customer – and quickly.’
He went on to say that there are some 50,000 EV charging points within the UK, and referenced South Korea, where there are 200,000 charge points. Turning again to the UK, he added: ‘By the tip of 2024, we could have 80-100,000 chargers, so we’re getting there.’
This Article First Appeared At www.am-online.com
