Alternative fuel vehicles have seen an increase year to date of 19.5% as of May 2018. Plug-in hybrid electric vehicles (PHEV) have increased by 36.2% in the same period, according to figures released by the SMMT. The Mitsubishi Outlander PHEV is the most common plug-in vehicle on UK roads. According to the DVLA there were 32,048 of these vehicles licensed in 2017.
The average volume of Outlander PHEV’s appearing at auction each month since the start of 2018 is 86 with monthly volumes shown in the graph below. The latest generation that came out in 2014 is starting to appear more frequently in the used market.
With volumes at auctions remaining low, the Outlander PHEV’s performance tends to be good with trade demand remaining strong. This has led to residual values holding up well as can be seen in the graph below. This graph shows Glass’s trade values expressed as a percentage of original cost new price, for a three-year old Outlander PHEV. The start of 2017 saw strong residual values, with a slight dip in the middle months. However, values increased recovered through 2017 ending the year at 50% 30,000 miles and 48% 60,000 miles.
The UK government low-emission vehicle grant puts eligible vehicles into categories that can qualify for up to a £4,500 contribution towards the cost of a new car. Category 1 cars are almost entirely made up of battery electric vehicles except for the BMW i3 range extending hybrid and the hydrogen powered Toyota Mirai. The Mitsubishi Outlander falls into Category 2.
The categories are:
- Category 1
- Vehicles with CO2 emissions of less than 50g/km and can travel at least 70 miles without producing any CO2 emissions. This category includes the following vehicles, Volkswagen E-Golf, Renault Zoe and Jaguar I-Pace. The grant will pay for 35% of the purchase price up to a maximum of £4,500.
- Category 2
- Vehicles with CO2 emissions of less than 50g/km and can travel at least 10 miles without producing any CO2 emissions. This category includes Audi A3 e-tron, Toyota Prius Plug-in and Kia Optima PHEV. The grant will pay for 35% of the purchase up to a maximum of £2,500.
- Category 3
- Vehicles with CO2 emissions of 50-70g/km and can travel at least 20 miles without and CO2 emissions. This category includes Mercedes Benz E250 e AMG Line and Mini Countryman PHEV. Category 3 cars have the same percentage contribution as category 2 cars.
The government grant has helped encourage the take-up of PHEV’s such as the Outlander, as cars sold that are eligible for the grant have seen an increase of 25.1% year to date. Of course another major factor of their popularity is due to the low rates of company car tax that they currently attract. With the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) on the horizon, it will be interesting to see how well PHEVs perform in the new tests. It is possible that the CO2 results of this new test could result in changes to the taxation on those cars effecting their future desirability. At Glass’s we will continue to monitor the release of CO2 data, in accordance with the new WLTP testing regime, and forecast how the results will change future second hand car values.