The vital role the remarketing sector is playing in the electric vehicle (EV) transition needs to be more widely recognised and supported if it is to succeed, says the Vehicle Remarketing Association (VRA)
Philip Nothard, VRA chair, said without an efficient and properly functioning EV service, logistics, storage and remarketing industry to support the volumes of electric cars and vans about to enter the used market, there would be massive volatility.
“We’re at an odd moment in the electrification process of the used market. Everyone talks about the issue all the time but the actual volumes remain very small. It’s kind of the phoney war before battle commences.
“However, that is going to change very quickly. New SMMT figures show that battery electric vehicles and hybrids of all kinds now account for more than a third of domestic production and at some point very soon, large numbers of electric company cars bought over the last couple of years will start to hit the used sector.
“We’re seeing the remarketing sector gear up very quickly to support this change. That means everything from logistics companies working out how to deliver EVs fully charged through to valuation experts pondering the impact of battery degradation on used values. Many of the questions arising don’t have simple answers.
“There has so far been surprisingly little general recognition of the role that remarketing is going to play in the EV transition but it should be very much at the top of the agenda. Without the investments we are making and the new knowledge we are accumulating, there is no used sector for EVs. And without an expert used sector, new sales effectively become unviable.
“What we’d like to see is more support provided to the sector in terms of an understanding of the role that we are playing in this transition and an understanding of exactly how difficult that process can be. Remarketing EVs is not business-as-usual. It marks a fundamental shift in almost everything we do.”
Philip added that the VRA was currently playing an important role in helping its members tackle the range of challenges being raised by electrification.
“We’ve seen VRA membership numbers pick up markedly in the last year or so and a key part of this is, we believe, a desire to share information and best practice surrounding EVs in the used sector. It sometimes seems that every day brings a new challenge based around electrification and we are playing a vital role in helping our members work through these issues together.”
A wider problem, Philip said, and one beyond the control of the remarketing sector, is that the crash in used EV values in recent months shows there is currently limited demand for these vehicles.
“Despite the fact that hundreds of thousands of vehicles will be making their way into the remarketing cycle over the next couple of years, there are few signs that consumer appetite for EVs is growing at a corresponding rate, leaving a probable and perhaps dramatic mismatch between supply and demand.
“We’re repeating a call that we made earlier this year around the time of the Budget, and which has since been repeated by other organisations, for the Government to consider interventions into the used sector to support the viability of EVs.”
The action taken, Philip said, could take a number of forms designed to make buying an EV appear to be a realistic purchase for everyday used car and van buyers. Potential support fell into three areas – practicality, pricing and security.
“Practicality means a massive increase in investment in both home and public charging, allowing drivers to access charging where and when they need it with the minimum of difficulty. The infrastructure needs to be visible and effective. There is also an argument for some kind of charger regulation to make issues such as payment easier.
“Pricing simply means making EVs affordable, which in real world terms probably equates to offering similar prices to petrol and diesel alternatives. Potential solutions to this could include offering buyers subsidies and low cost loans, both of which are being seen in other countries.
“Finally, security refers to some kind of guarantee over battery life. It is becoming common knowledge across the motor industry that battery degradation is rarely an issue, but consumers are clearly still deeply worried about this area. Some kind of guarantee needs to be provided to overcome those fears.”
How long government support would be needed was unclear, he said, but it would probably be required in some form until EVs became the dominant element of the used market.
“Essentially, government and the remarketing sector need to hand-hold a large number of used car and van buyers through their first electric purchase, helping them to overcome the range of issues that many are encountering and allay the fears that many are expressing.”
Further details about the VRA can be obtained by e-mailing info@thevra.co.uk.