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Highlights:
- Sales of electric vehicles have been impacted by soaring electricity bills, a new survey has revealed.
- Not just EVs but diesel car owners are also shocked by the fuel prices.
With petrol and diesel prices soaring, one would generally expect that the switch to electric vehicles will hasten. While this was true till a few months ago, new research has emerged that it might not be the case anymore due to the soaring electricity bills.
The research from British motoring association The AA has revealed that motorists are now hesitant to switch to EVs because of the high energy bills, with over 70% of drivers putting off plans to own an electric car. The poll, conducted in September 2022, had more than 12,500 respondents, who said that rising energy bills were the primary reason stopping them from shifting to EVs.
The AA also said that while drivers will have to eventually switch to zero-emission vehicles after the 2030 sales ban on new fossil-fuels-powered cars, soaring energy prices have tainted their views of EVs.
Image source: © Kurhan | Megapixl.com
The UK is particularly exposed to the present energy crisis caused by supply chain issues due to the Russia-Ukraine conflict and the prolonged pandemic-related lockdowns. Therefore, it is not just the EVs that concern the drivers. AA's survey also underscored that the country's 11.4 million diesel car owners are also worried about the rising average pump prices.
Electric cars could be cheaper to run in the long term compared to traditional internal combustion engines, AA said, citing their lower servicing costs and home charging.
In the wake of AA's survey, let us explore some London-listed car dealerships and analyse their investment prospects.
Auto Trader Group Plc (LON: AUTO)
Auto Trader Group is a British automotive classified business that deals in new and used cars. Holding a market capitalisation of £5,003.11 million, the company is presently a constituent of the blue-chip FTSE 100 index. It has an EPS of 0.26 as of 2 November, and over the past 12 months, its share price has fallen by almost 12%. The year-to-date or YTD return is even lower at -27.57%.
Pendragon Plc (LON: PDG)
The new and used vehicles retailer has a market cap of £378.57 million, with a 52-week return of 44.21%. On a YTD basis, the PDG stock has given almost 18.27% returns to investors. The EPS stands in the positive territory at 0.04.
Vertu Motors Plc (LON: VTU)
Another London-listed car dealership is Vertu Motors, which belongs to the FTSE AIM-listed index. The company enjoys a market cap of £168.54 million as of 2 November and its share price has slumped by more than 20% in the past 52 weeks. The YTD return is also negative at -29.77%, but the EPS is positive at 0.17.
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
