Fiat slashes electric car prices in a desperate bid to stir up demand

With reports of declining demand for electric cars, Fiat has taken it upon itself to lower the price of its new battery models in an effort to boost sales.

Nearly 12 months after the government halted the Plug-in Car Grant (PiCG), the Italian marque is launching its own program in hopes it will help dealers move more units of the all-electric 500e and 500e Convertible.

Fiat has also written an open letter to the UK government urging ministers to provide more incentives for UK motorists to switch to electric vehicles (EVs).

While the official PiCG offered to cut the price of a new EV by £1,500 by the time the scheme was suspended a year ago, Fiat is offering to take a lot more off the price of its EVs.

At £3,000, the Fiat ‘E-Grant’ doubles what was on offer at the close of the PiCG in June 2022.

This will reduce the price of the 500e hatchback from £28,195 to £25,195, while the starting price of a 500e Convertible will drop from £34,195 to £31,195.

And it is not only Fiat that is taking drastic measures.

Car dealers are slashing the price of their new electric models in a desperate bid to revive sales in the face of declining demand.

Discounts of up to 14 percent are now available on some EVs as manufacturers look to whet the appetite in another telltale indication that consumer interest is leveling out.

It translates into savings of more than £4,000 on some battery cars, according to market research conducted at the end of May.

Fiat has acknowledged that sales of electric vehicles are not rising as fast as they or other manufacturers had expected – and hoped.

It’s the latest in a spate of reports in recent weeks pointing to declining demand for electric cars, despite the government’s ban on the sale of new petrol and diesel engines from 2030 taking effect only 78 months from 2030.

A recent market report suggested that demand for electric cars is down 65 percent year-over-year.

And the most recent registration data from the Society of Motor Manufacturers and Traders – the body representing car manufacturers in the UK – also indicate that the exponential growth of the vehicle segment in the UK is slowing.

The fall in registrations is so great that the SMMT has already been forced to revise its forecast for EV sales this year and next.

In April, it lowered its predictions for the market share of electric cars in 2023 from 19.7 percent to 18.4 percent.

It also lowered its forecast for 2024, saying it now estimates that 22.6 percent of all registrations next year will be pure electric cars, up from the 23.3 percent it predicted in January.

We need more incentives to get demand for electric vehicles back on track, says Fiat

Fiat believes the discontinuation of the PiCG is one of the reasons for this dip in consumer appetites.

Introduced in 2011, the PiCG helped boost sales of all-electric cars from less than 1,000 models to nearly half a million by the time it was delisted early on June 14, 2022.

The grant had been phased out from the original £5,000 offered over a decade ago. In 2016 it was reduced to £4,500 and in 2018 to £3,500.

In 2020 it went to £3,000 with the addition of a new qualifying technique available for cars under £50,000. And in 2021 that went to £2,500 and a £35,000 vehicle limit, before finally being reduced to £1,500 before being cleared completely.

But while the UK government has opted to scrap the incentive – as well as ending its Electric Vehicle Homecharge Scheme (EVHS) offer to reduce the cost of installing a charging device in drivers’ homes – similar EV schemes remain active in 21 European countries. Today.

And in countries such as Germany and Spain, they can reduce the price of a new electric car by up to €9,000.

Damien Dally, chief executive of Fiat UK, said the company appreciates the government’s choice to ‘refocus’ its funding on investment in strengthening public charges, but says it needs to refocus its attention on encouraging the purchase of vehicles.

“With the cost of living crisis and the rising cost of electric vehicles, coupled with our net zero climate targets, we believe more needs to be done to incentivize individuals to afford to make the switch.” , he said.

In his open letter to Transport Secretary Mark Harper, Mr Dally writes: ‘Last June the UK Government withdrew its subsidy – once worth up to £5,000 – for electric car buyers, and while many factors play a role, it is no coincidence that the market share of electric vehicles has since stabilized in the UK.

Some data even suggests demand for EVs is down 65 percent year-over-year, just when it should be accelerating.

“We understand that the cost-of-living crisis has created huge financial turmoil, but other countries around the world have shown how powerful incentives can be to drive demand and help people make the switch to electric cars.”

He asked Mr. Harper to come to Fiat Encouraging UK motorists to switch to electric so we can drive together towards a sustainable zero-emissions car future.

Why is the demand for electric cars falling?

In April, the online car marketplace Auto Trader said buyer interest in new EVs had fallen by nearly two-thirds since the beginning of last year.

Internal data shows that electric car applications are down 65 percent compared to 12 months earlier.

The companies Road to 2030 report attributes the decline in demand to several factors such as their premium prices, the cost of living crisis, higher loan interest rates and a rise in energy prices.

One of Britain’s largest motorcycle dealers also spoke out about declining interest in battery vehicles, saying demand is ‘cooling’ as there are not enough charging points available.

Vertu Motors denounced the “inadequate public charging infrastructure” as contributing to the slowing momentum around electric cars.