Electric cars supply exceeds demand, says major British dealership

More electric vehicles are being made by manufacturers than drivers want, one of Britain’s biggest car dealerships has said.

Vertu Motors, which trades under brands including Bristol Street Motors, said supply of new and used electric models is outstripping demand, forcing manufacturers to slash prices in an effort to shift stock. 

“Recent increased supply of new electric vehicles appears to be exceeding retail demand, creating an imbalance in pipeline inventory,” the company said.

“Manufacturers are reacting to this through the offer of discounted prices and supported finance rates to stimulate retail demand.”

Elon Musk’s Tesla is among the producers which have cut prices this year in a drastic attempt to boost sales.

Ministers are seeking to push drivers towards electric cars as part of the move to net zero, with policies including the Ulez (Ultra Low Emission Zone) in London, which levies a £12.50 daily charge on those with older petrol and diesel vehicles if they enter the capital.

Manufacturers have responded by ramping up the production of battery powered and hybrid vehicles.

Almost two in every five cars produced in the UK so far this year are electric or hybrid, according to the Society of Motor Manufacturers and Traders (SMMT), an industry group, up from less than a third between January and July last year.

More than 200,000 such vehicles have been produced so far in 2023, the SMMT said, out of a total of almost 527,000 cars.

While total car production has risen by 14.2pc on the year, the number of electric and hybrid cars made in Britain has almost doubled.

The vast majority of those made in the UK are exported, with more than four in every five destined for overseas markets, led by the EU, US and China.

Although car production has increased steadily over the year, recovering after years of Covid turmoil and the ensuing chaos in the supply chain which included a global shortage of computer chips vital to vehicle manufacture, output is still nowhere close to pre-pandemic levels.

The SMMT expects production to rise to around 860,000 this year, one-third below the 1.3m manufactured in 2019.

Meanwhile a survey of businesses by the CBI showed private sector activity overall fell again in the three months to August, marking a year of flat or shrinking output. Manufacturing, services and retail companies all expect to shrink further in the coming quarter.