Carmakers Slash Electric Car Prices to the Bone—Industry Warns the Party Can’t Last
Industry leaders say record EV discounts are gutting profits and cannot continue, urging urgent government action.
The discount dash
Walk into any British showroom this month and you’ll spot the same neon flyers: “£8,500 off a new EV—this week only.” From supermarket car parks to glossy billboards on the M4, the message is identical: electric cars have never been cheaper. What began as a gentle nudge to tempt diesel die-hards has turned into an all-out price war, with manufacturers quietly bankrolling eye-watering incentives to keep forecourts moving.
Who’s paying the tab?
Behind the curtain, the numbers look bruising. The Society of Motor Manufacturers and Traders (SMMT) calculates that the average cash discount on battery-only models has doubled in twelve months to £5,900, while some brands are shaving as much as 18 % off list prices. “Margins are compressing faster than at any point since the 2008 crisis,” says SMMT chief economist Alice Brown. “If this trajectory continues, we’ll see plant closures and job losses—plain and simple.”
The subsidy cliff edge
Industry insiders point to two converging forces: the abrupt end of the £1,500 Plug-in Car Grant last June and a 40 % slump in European EV demand. With government support gone, brands must shoulder the full incentive burden just as supply chains ramp up. “We’re effectively subsidising the transition ourselves,” one senior executive at a volume carmaker told The Ledger, requesting anonymity. “Every unit we sell right now is a loss-maker.”
Consumer jackpot—until it’s not
For buyers, the bargains are intoxicating. Sarah and Mark Dobson, teachers from Bristol, last week collected a new hatchback for £219 a month—£90 less than their previous diesel. “We felt like we were robbing the dealer,” laughs Sarah. Yet analysts warn that unsustainable discounts distort resale values, making future EV adoption more expensive once incentives evaporate.
“Heavy discounting is a sugar rush. When the subsidies stop, sticker shock will return with a vengeance.”
— Elena Vance, Auto Analyst, GreenFleet Research
What happens next?
Manufacturers are pleading for a reintroduction of targeted grants tied to British-built vehicles, but Treasury officials say public finances are stretched. Meanwhile, battery costs—while falling—remain 30 % higher than in China, leaving domestic firms at a structural disadvantage.
- SMMT forecasts a 22 % drop in UK EV output if support is not restored.
- Overcapacity in Europe could push more Chinese imports into British showrooms.
- Some brands may pivot to subscription or battery-leasing models to mask upfront costs.
The takeaway
Today’s electric car bargains are real, but they’re built on shaky ground. Unless Whitehall and Brussels find fresh ways to support the market, the current fire-sale will burn itself out—taking jobs, investment and consumer confidence with it.