You don’t need us to tell you how expensive petrol and diesel are in the UK right now… but we will anyway.
May 2022 saw the average cost of diesel rocket to 183p per litre, taking a tank of fuel to over £100 for the first time in history. Petrol has also blown up to an average of £95.
The BBC reports 3 reasons for the price of fuel increasing so dramatically in the past year. Firstly, the price of crude oil used to make petrol and diesel has gone up since the start of the COVID pandemic when demand dropped massively because of lockdown. Secondly, crude oil is paid for in US dollars which makes fuel more expensive because the GBP has been weak against USD. Finally, the Ukraine-Russian war has been cited as a cause for rising fuel prices. Although Russia provides just 6% of its crude oil from Russia, it has still had an effect on global prices due to the demand put on other sources after Russia has been put under sanctions.
So, has the huge swelling of fuel prices driven consumers towards purchasing electric vehicles?
An energised market
The Society of Motor Manufacturers and Traders found that plug-in sales have gone up 35.5% and hybrids have gone up 28.8% in the past year. Chief Mike Haves believes “Electric car sales are energising the market”, so it is no surprise that registrations of battery electric vehicles surpassed diesel for the first time ever as of March 2022. This brings the market share of EVs to 10.9% in July.
A report released in May 2022 by the National Bureau of Economic Research shows that sales of electric vehicles respond to rising petrol and diesel prices at around 4-6% the rate of electricity prices.
What does this mean? It means consumers are driven towards purchasing electric vehicles by the increase of fuel prices, yet they aren’t off put as much by the rise in energy costs. Hooray for planet Earth!
Sparking changes in consumer behaviour
Chief Mike Haves for the Society of Motor Manufacturers and Traders (SMMT) refers to EV sales as a buoyant new car market” which is vital “to help drive fleet renewal which is essential to the delivery of carbon saving”.
Volkswagen Financial Services UK believes the massive increase in fuel prices may persuade customer that investing in an electric car is a wise long-term decision. Their June 2022 report states, “the impact of the hike in petrol and diesel prices… cannot be discounted” and this is certainly supported by 833,000 EVs in the UK currently.[2]
Car retailer CarWow has seen a growth in demand for EVs following fuel price increases which accommodates buyer behaviour’s desire for more sustainable motoring.
Hugo Griffiths of CarWow notes that, “rising petrol and diesel prices are also having an effect on consumer habits” leading to the growth in EV sales for the company since customer desire for “clean motoring” is translating into purchases[3].
With the growing presence of emission and Clean Air Zones in the UK, the increase in public desire for more sustainable motoring, and the hiking of fuel prices electric vehicles are becoming more and more popular.