Editor's letter: Discounts top £20k as car makers race to shift EVs

Average discounts for new electric cars in the UK now exceed those for petrol cars – a watershed moment in the new car market’s race to hit a mandated 22% of sales as electric cars in 2024.

The recent half-year registrations data from the SMMT revealed a market share of 16.6% for electric cars so far in 2024 - just half a percentage point ahead of 2023 - although demand was stronger in June, at 19%.

However, the UK’s new car market must now overperform for the rest of the year to make up lost ground and hit that magical 22% mark. Remember, car makers will be fined for missing this target, as laid out in the ZEV mandate legislation.

With interest rates and the cost of living still high, consumer confidence still low, electric car prices seen as too expensive and no support from either the previous or new governments forthcoming, the only real play left for car makers is to discount prices themselves. 

According to What Car? Target Price data, the average total cash and finance discount on a new electric car is now 9.9%, compared with 9.6% for petrol cars. This works out at an average of £5856 off the price of a new electric car in the UK.

Dig deeper into individual models and you’ll get an insight into who has more work to do than others in shifting electric cars to hit that target. Mazda is the biggest electric car discounter, with a whopping 24.5% on average (£7353) being offered on its MX-30 range, while Stellantis brands Vauxhall (16.9% discount, or £6251 per car) and Fiat (14%, £3407) follow closely behind.

Ford has said it may have to restrict the supply of sales of non-electric cars in order to hit the ZEV mandate, yet it is still trying hard to shift the Mustang, with discounts of £9403 on offer. 

The biggest individual discount on offer on any electric car is the £21,395 buyers can get off the Audi E-tron GT, although that’s shy of the £27,441 you can get off a BMW M8, the highest discount of any car on sale when all fuel types are considered. Still, for the biggest savings on offer, electric or otherwise, head to Audi and BMW dealers, as five-figure discounts are commonplace at these ‘premium’ brands. 

Discounting disappeared from the new car market with Covid and the subsequent semiconductor chip shortage, which limited supply. Car makers pledged discounting would not to return, particularly with the then expected rise of agency sales, meaning fixed prices and the end of haggling.

Perhaps that might have held in a normal market, but there’s no such thing as normal any more. These, though, are discounts with a difference. That's because they come at a time when established car makers are more squeezed than ever, being dictated by legislation towards a technical solution in the form of battery-electric vehicles that cost a fortune to develop yet are being shunned by consumers and not supported by legislators who asked for them in the first place.

Stellantis is one car maker that has been particular scathing of the ZEV mandate, with boss Carlos Tavares recently calling it “a terrible thing for the UK”.

Given Stellantis has said it has little choice but to comply, you can see Tavares’ point: he’s supporting two factories in the UK, employing thousands and investing millions, yet at the point of sale he’s likely to be losing money. Such is the folly of this increasingly botched-looking shift to EVs in the UK.