Competing brands could create an electric car price war, forcing down costs for drivers and helping more people switch to cleaner vehicles.
New research has found that the upfront price of an electric car will fall as a result of competition from China and new Government regulations.
The minimum annual targets will require 22 per cent of new cars sold in 2024 to be zero emission before reaching 80 per cent in 2030 and 100 per cent in 2035.
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Analysis shows a price war could take place this year
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Manufacturers who fail to meet the targets set out by the Government will be hit with fines of £15,000 per polluting vehicle.
Analysis suggests that Chinese manufacturers will capture a sixth of the UK’s new electric car sales by 2030 as they turn to grow the brands overseas.
Demand and interest for Chinese car makers is growing with brands like BYD and GWM already having a presence on British roads.
Auto Trader highlighted how Chinese brands would be looking to cut costs to attract drivers, pointing to the price disparity between vehicles in the UK and abroad.
The BYD Dolphin starts from £25,000 in the UK, compared to just £13,000 in China, while the GWM ORA 03 costs £31,000 in the UK while Chinese drivers will pay just £12,000.
Ian Plummer, Auto Trader commercial director, said Britons looking to switch have “never been in a better position” to benefit from EV prices dropping.
He said: “Even though the PM has pushed back the ban on sales of new petrol and diesel cars until 2035, the introduction of the ZEV mandate means that manufacturers are still under pressure to sell more electric cars and to do that, they’ll need to compete on price.
“The rise of China in electric cars will only add to that pricing pressure as they have the firepower to grab UK market share.
“To really ignite mass adoption of electric cars, the Government should consider a fairer approach by equalising VAT on public and private charging as well as reducing VAT on second-hand electric cars.”
The majority of new electric vehicles on the market in the UK tend to cost more than £30,000, although a number of manufacturers are aiming to slash costs in the coming years.
Brands have already unveiled plans for cheaper EVs including Citroen’s e-C3 which is expected to be priced between £22,000 and £23,000 and have a substantial range of 199 miles.
Elon Musk, the founder and CEO of Tesla, has spoken previously of the brand’s plans to introduce an entry-level EV with a price tag of around £22,000.
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Chinese brands are expected to make a large step into the European EV market this year
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Steve Gooding, director of the RAC Foundation, praised the new research, saying: “This coming year needs to be a good one for sales of electric vehicles or else car companies will fail to meet their mandatory zero-emission sales targets and the country is going to falter in its drive to switch to green motoring.
“At the end of 2023, there were just shy of one million pure battery electric cars in the UK.
“This sounds a lot but needs to be seen in the context of the nation’s overall car fleet which numbers nearer 33 million. The road to reducing the environmental impact of driving is a long one.”