Prices for the Abarth 500e have been cut by £4220 to £29,975, as the Italian brand targets the burgeoning fleet market to improve sales of its electric hot hatch.
It comes after parent brand Fiat cut the price of its 600e electric crossover by up to £4020, giving the two EVs an identical starting price.
A significant portion of the reductions comprises the £3000 ‘e-grant’ that Fiat and Abarth previously offered on their EVs, to incentivise retail buyers to make the switch away from petrol power.
A spokesperson for Abarth and Fiat UK explained to Autocar that this discount was offered by the company directly to dealers on the condition that they would pass it on to buyers.
Providing the discount in this manner meant the list prices of the cars weren't affected, so fleet buyers were excluded from the deal. Rolling the e-grant into the list price, rather than offering it through dealers, means fleets will now benefit.
Targeting fleets is crucial to the success of most new cars in the UK at present. According to the Society of Motor Manufacturers and Traders (SMMT), fewer cars were sold to retail buyers last year than in 2020, when the Covid pandemic forced showrooms to close.
Fleets and businesses accounted for three in five (62.2%) of new cars sold in the UK last year, and more than a quarter of those (25.4%) were electric. As such, of the 381,970 EVs sold last year, 80.2% (306,451) went to fleets.
The imbalance between fleet and private sales has largely been caused by fleet buyers receiving financial incentives for going electric while retail buyers do not.
Fleet owners of EVs will be charged 3% benefit-in-kind tax for the 2025/26 financial year, compared with 8% for plug-in hybrids with CO2 emissions below 50g/km and 40-69 miles of electric range or 29% for an ICE car emitting 120-124g/km, such as a Volkswagen Golf.
Incentives for private buyers of EVs disappeared in 2022 with the removal of the government's Plug-in Car Grant.
Introduced in 2011, the grant initially offered up to £5000 off the purchase price of all plug-in cars (including PHEVs) but was watered down to latterly offer up to £1500 off EVs priced below £32,000.
The SMMT has called for the government to cut VAT on private sales of EVs to boost the segment.
“Incentives make a big difference, as they help people into these vehicles while also sending the right messages,” said SMMT chief Mike Hawes.
Similarly, Kia UK boss Paul Philpott told Autocar: “There aren't enough carrots for the consumers, other than in the fleet market, and the fleet user-chooser is proving that where they have relatively sensible incentives behind electric vehicles, buyers want to try them; where there aren't, they're more reticent to move in numbers."
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This smells of desperation to me, now the 500e costs less than the petrol engined 595 always thought that the Abarth range was wildly overpriced and this price cut may kick start sales here in Blighty but I think that further price reductions may be needed
You can bang on as often as you like about fleet, lease, private sales etc but as the end of the day this story is about Fiat and Vauxhall, with their previously overpriced Corsa, ripping off consumers and not wanting BEV's to sell, but companies like MG and Renault with the R5 have highlighted the Stellantis BEV plan for what it was.