High-end electric car sales lag as buyers favour 'ultimate' ICE models

Mardell also said that even PHEV power wasn't in that much demand at the top end in China – something that JLR does offer for its top-end SUVs.

However, he expressed confidence that customers would be there for the electric Range Rover, which will be available to order from the of this year, with deliveries starting in 2024 and early 2025 in China.

“Two years down the line, it will be very difficult to predict exactly what the take-up rate will be,” he said. “We’re confident that if we offer brilliant modern luxury offering, then in time the transition from ICE to BEV will actually happen.”

In the UK too there are signs of sluggish take-up at the top end of EVs. For example, sales of the still relatively new BMW iX – which starts at £69,905 and climbs to £122,775 – are down 12% in the first six months of 2023 compared with the same period last year.

The fall in demand for the iX is worse across Europe, but global sales of the SUV were saved by a wider roll-out in the US, which is now the model’s biggest market and contributed to its 65% growth to 21,172 sales.

What’s unclear, though, is how much of that demand is organic and how much is stimulated by discounts. In the UK, for example, BMW offers a discount of nearly £6500 on the iX if you take the financing option.

Mercedes’ move to direct sales means its incentive path is more limited, but it has increased the fee that its dealer ‘agents’ make on each EV sale from 5% to 6% of the total price – an increase of 20% – to help drive demand.

That fact was revealed by dealer group Penske – operator of the Sytner group in the UK – on its earnings call, in which it too was asked about sluggish sales of high end EVs.

CEO Roger Penske revealed that in the US, the company was sitting on EQS stock that would fulfil demand for the next 190 days, compared with 113 days for Mercedes EVs overall.

“We're seeing discounts and also incentives here in the US, or remove this you've seen what's happened domestically here with Ford,” CEO Roger Penske said, referring to Ford’s $10,000 price cut on the base-model F-150 Lightning.

He also called on premium car makers and their captive finance companies to “step up” on residuals for EVs. If residual values are set too low, meaning a pessimistic outlook on EV used prices, that pushes up finance costs amid already high interest rates. “I think it's sticker shock for the customer,” Penske said, referring to high EV prices across the board.

Overall, EV sales are still on the rise. For example, the UK saw growth of 38% in EV registrations in the first seven months, giving EVs a share of 16% of the market, up from 14% the same period the year before. 

The premium leaders are still growing EV sales globally. The Volkswagen Group, including Audi, recorded a 48% jump in EV sales to 321,610 in the first half of the year. Mercedes recorded a 93% jump to 112,850, while BMW recorded a 94% increase to 152,936.

BMW is confident that it can hit its target of 15% EV sales by the end of the year.