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Either the UK has a tiny reliance on Russian oil, or we have all been lied to yet again!


Unless many of us are very cautious, writes Iain Robertson, we can forget all new car aspirations for a considerable period of time and our government is going to be forced into reneging on its all-electric future set for 2030, as not only are energy prices running at record highs but only a few regions may qualify to buy EVs and BEVs.

Thanks to an extensive survey into the affordability of electric vehicles in the UK, carried out by a Middle East insurer, unless you want to end up on Poor Street very quickly, you are going to be forced to reflect judiciously on personal transport needs. It is worth highlighting that a great imponderable related to residual values of outgoing fossil-fuelled transport is not answered comprehensively, because those values are presently haywire and appear to possess zero logic today. However, the UK car parc is going to be over-populated by petrol and diesel powered vehicles for at least 25 years post-switch-off and trading values will be established, even though selling new examples will be banned.

Disturbingly, almost 20% of the UK cannot afford even the cheapest electric vehicle through finance, according to the new research. CarInsurance.ae used ONS survey data to compare the average monthly income in each area with the estimated cost per month of financing a new electric car. The study based the figures on the 20/4/10 rule for financing a car, which recommends a 20% deposit, a four-year loan, and monthly repayments no higher than 10% of monthly income.

However, the figures revealed that 78 areas in the UK could not finance even the cheapest new electric vehicle (EV) based on the average salary of the area. The cheapest EV on the market, the Skoda CITIGOe iV, which retailed at £15,000, is too expensive for almost 20% of the UK. With an estimated finance repayment of £269.75 per month, 78 areas in the UK cannot afford to finance the vehicle with 10% of their monthly income. Blackpool residents are said to have the lowest average income of any area in the UK (£27,052). Following the 20/4/10 rule, 10% of the monthly salary equates to £225.43 available for monthly repayments – £44.32 short of the funds needed for the Skoda. Nottingham is another area that falls short on affordable monthly repayments, with 10% of an average resident’s monthly income amounting to £237.04.

The average salary in the majority of UK areas means that a typical individual can afford to spend between £270 and £343 per month on finance repayments, resulting in a total of three electric vehicles being a viable financial option. Along with Skoda’s addition to the EV market, the VW e-Up! and the recently discontinued SEAT e-Mii are the most affordable electric cars in the UK. Yet, 71 areas in the UK can afford only the Skoda CITIGOe, including the Isle of Wight, Portsmouth and Sheffield. Both the VW e-Up! and SEAT e-Mii retail for £16,000, which means that 134 areas are able to afford only the three least expensive EVs on the market.

Interestingly, Kensington and Chelsea residents can afford the greatest number of EVs on the market, a total of 37. Following the 20/4/10 rule, the London borough’s average annual income of £89,827 would enable someone to finance an EV for an estimated £748.56 per month. The most expensive car in the suitable financing range is Audi’s Q4 e-Tron, retailing for £40,750, resulting in monthly repayments of £732.82. On the other hand, the most expensive vehicle is the BMW iX xDrive 50, retailed at £91,905, followed by the Porsche Taycan, setting buyers back £83,580.

A spokesperson for CarInsurance.ae commented on the findings: “With little choice available, electric cars are becoming more and more popular on British roads, with 2021 marking the best year for EV sales to date. With the recent surge in fuel prices and fears that another fuel shortage could be on the horizon, many could be more inclined to go down the electric route. However, is it very interesting to see that 20% of the UK can’t afford to finance even one EV, and the majority of the population having an option of only three cars. EVs have come a long way since they first hit the commercial market, and majority of car manufacturers are now producing electric versions of their vehicles, but it is fair to say that the EV market will need to become even cheaper or show more promising longevity to ensure they are a viable replacement for petrol or diesel cars.”

Personally, I believe that there are zero longevity issues confronting EVs. They have fewer working parts than fossil-fuelled transport and, while servicing and maintenance requirements are still required they are not of the same order. However, I still feel some pity for those early EV adopters, whose haloes are looking ever so tarnished by the rapid aging of their EVs and the inability to update their systems and technology cost-effectively, if at all. Whether we can afford them, or not, prices fluctuating downwards are an unlikely prospect, as transport disappears as rapidly as the very exhaust pipes handling fossil fuel emissions.

Conclusion:       Suggesting that people earn more is simply not an answer to ‘affordability’. However, volumes of scale are unlikely to provide a solution either, as list price parity with battery-electric transport is being achieved by whacking up the list prices of fossil-fuelled examples and using stock unavailability as a means to create rarity and desirability, for which queering of the market, the motor industry is entirely to blame.