Demand for EVs is Surging, but Supply Issues and High Prices Could Slow Down Sales
The latest insights from car site DoneDeal, has found that the prices of both brand new and nearly new EVs have increased since last year. DoneDeal’s proprietary pricing data shows that the average price for a brand new electric vehicle on DoneDeal in 2023 is €64,775, a 13% increase when compared to the same period last year. When looking at nearly new EVs (1-4 year old models), the average price in 2023 is €42,661, a 10% increase compared to the same period in 2022 (Data accurate as of May 17th 2023).
The price rises observed in the electric car market are indicative of the price increases DoneDeal Motors is seeing across the board in the Irish motor Industry for all car types, as per the DoneDeal Car Price Index. Despite these price increases, demand for brand new EVs has increased by 35% in 2023 (DoneDeal year on year proprietary ad view data).
What has caused the growth of prices of electric vehicles over the past year? The shortage of new EVs has put a strain on supply in the Irish market which exacerbates the pricing issue. The reduction of the EV grant in July is fuelling the increase in demand as people try to make the switch to electric before then.
It has been well documented that Tesla have reduced their prices worldwide, but this appears to be an outlier as the rest of the market haven't followed suit just yet. Consequently, the overall trend indicates a rise in prices for EVs.
It’s expected that as the market develops, economies of scale and improved battery technologies should improve the pricing situation, but that effect isn’t likely to be felt until the close of this decade. Looking from a shorter term perspective, there have recently been new entrants to the EV market in Ireland at various price points which should provide more affordable options for prospective EV buyers in the months and years ahead.
DoneDeal also found that for the first time in 2023, an electric vehicle is the most popular new car across all fuel types. The Volkswagen ID.4 is the most in demand new car with Irish consumers. The ID.4 had previously claimed the top spot between September and December of last year before being overtaken again in January 2023 by a diesel car, the Peugeot 3008. The Volkswagen ID.5 is the only other EV represented in the top 10 most in demand new cars in 2023.
Ireland’s most popular new car being an EV, coupled with the increase in demand shows there is significant market demand for EVs in Ireland. These findings support the notion that the limitation lies with the supply shortage and subsequent inflated prices rather than the reluctance of Irish car buyers to embrace electrification.
