Norway is leading the way when it comes to the transition to electric vehicles with the highest concentration of plug-in-vehicles across Europe and sales continuing to rise. However, a lack of demand in the used market is highlighting some of the challenges this ‘new’ sector faces. Here, Peter Grøftehauge, CEO, Autorola Group reports.
Norway has the most developed EV market in Europe, if not the world and in 2018 31.2% of the 147,929 new cars sold were EVs according to data from the independent Norwegian Road Federation (OFV).
The Nissan LEAF is the best-selling car of any kind in Norway followed by the BMW i3 and the Tesla Model X, with a reported 30,000 pre-orders for the new Tesla Model 3 this growth is likely to continue.
100% zero emissions
However, whilst this is good news as the Norwegian government aims to achieve 100% zero emissions new car sales by 2025, a key challenge which Autorola is supporting the market with is the management of the used cars when they come back from lease. Although demand for EVs is very high across the board, it is proving challenging to resell used EVs when lease options on new vehicles appear so appealing.
Premium segment vehicles best sellers
‘At present, used EVs are priced too high for the market conditions,’ explained Peter Grøftehauge, CEO, Autorola Group who also points to two out of three best-selling EVs in the country being premium segment vehicles.
Peter continued, ‘Rightly, dealers want a return on their investment, but a lack of demand locally is driving them to explore the potential for export but even this has its challenges at present due to the lack of true insight into EV markets. It’s a challenge we are looking closely at and working with our various partners to help resolve.’
Oversupply in the used market
A key aspect of this oversupply in the used market is centred around ‘trust’ relating to the uncertainty still surrounding long-term product reliability beyond the length of a vehicle’s manufacturer warranty along with challenges around infrastructure. A consumer survey by Norsk Elbilforening also indicated that consumers have less confidence in Norway’s political ability to maintain a predictable EV-policy.
‘There is no quick fix to this,’ explained Peter. ‘What the domestic market is willing to pay for a used EV does not currently align with the value vendors are placing on the vehicles. The result is a stagnated supply and demand curve which is seeing vendors sitting on the assets and seeking alternative means of disposal.’
Exporting used EVs
One area some vendors are exploring is the opportunity of exporting used EVs, however this is also presenting challenges as there are currently no obvious markets where demand necessitates imports within Europe or further afield.
‘Norway is in a very interesting position and is a real case study for the EV sector. Adoption of the technology has been world leading, in many ways thanks to the associated infrastructure and government incentives, but the rest of the market is finding it a challenge to keep pace,’ said Peter.
He continued, ‘We look at products such as used personal contract purchase (PCP) in the UK and beyond, and know it is coming to the rest of Europe. In my opinion, this is a solution that is needed and will certainly support the used EV sector.’
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