The gender pay gap could slow down the transition to electric cars

We all want to play our part in creating a greener planet, but the gender pay gap could be holding some back from making more sustainable motoring choices.

It’s a heavy hitting topic, but if we want to create a more inclusive motor industry it’s one we have to talk about.

With electric cars rapidly growing in popularity, it’s clear that many of us are keen to make the transition away from petrol and diesel engines so we can lower our road emissions. And electric car leasing is a fantastic way to do that; 74% of our sales in 2023 were electric car leases.

YouGov data also shows that many British drivers agree that electric cars are the future of the motor industry.

But while it’s encouraging to see the green revolution taking off, systematic change rarely happens all at once. And the high cost of some EV’s may be shutting some consumers out of the green future we all need to strive towards.

We’re looking at the affordability of electric cars and how the gender pay gap might have an impact on who is buying and leasing them.

What is the gender pay gap? 

You’ve probably heard a lot of different terms when people talk about pay. And some of them can be confusing.

So, let’s clear up a common misconception before we really dive in.

The gender pay gap and equal pay aren’t the same thing.

Equal pay is the expectation that men and women are paid the same amount for doing the same job, or work of equal value. This is because it’s unlawful to pay staff unequally because of their gender.

All our Leasing Consultants do the same fantastic job day in and day out, regardless of their gender, so they deserve (and have a right to) the same basic salary.

The gender pay gap on the other hand, looks at the average pay between all men and women across the UK workforce.

While the gap has been slowly declining over time, the difference as of April 2023 was measured at 7.7% according to the Office for National Statistics.

Some main points to take away from the latest research show that there is still a significant pay gap between employees aged 40 and over, compared to those under the age of 40.

And the gender pay gap is much larger between higher paid employees.

But what does mean when you break it down?

Let’s put these facts into context. If there’s a significant difference in the gender pay gap around the age of 40, we must consider why this is.

If you’re a woman who plans on having children, the chances are you’ll have made a start on your family by the age of 40. And while the popular narrative is that women can have it all, realistically, the demands of raising a child can take a toll on career progression.

As the National Office for Statistics goes on to explain, a lower share of men working part-time. So it looks like the parent who takes the hit is usually the mother.

So, if you’re a woman over 40 with children, and working part-time to be a more available parent, on average you’re going to be paid less than men in your age bracket.

But even if you are (or plan to be) child-free, there is still an active bias enforcing the pay gap.

The Guardian reported recently that nearly one in five male HR managers were unwilling to hire women they thought would go on to start families.

And nearly one in seven consider men as better suited for top jobs or senior management than women.

So, on the whole, it’s fair to say that women are still earning less than men regardless of their lifestyle choices.

And if that’s the case, how is this going to play into the EV revolution?

The cost of EV's 

Upfront cost

If you’ve thought about going electric at all, no doubt you’ve considered what it would cost.

As buying or leasing a car is a big financial commitment, we’d be worried if you didn’t put some serious thought into it.

And one of the big criticisms surrounding EV ownership is expense. That’s supposedly why Rishi Sunak has pushed back the ban on sales of new petrol and diesel cars to 2035 after all.

But do electric cars actually cost more than petrol or diesel models?

At the moment, yes. The upfront cost of buying an EV is on average more expensive for consumers. But this is down to manufacturing costs; currently, it costs more to make an EV than it does a petrol car.

But this is expected to change.

Battery costs have already fallen by 14% in the last year, and one of the Guardian’s excellent EV myth busting series reports that electric SUVs in Europe will hit price parity with petrol models as early as 2025.

As tech improves and EV infrastructure continues to grow, production is expected to become less expensive, and the high upfront costs should drop to more affordable levels. But this process could slow if EV uptake plateaus among consumers, instead of growing as expected.

And if prices don’t drop, electric vehicles may remain out of reach for lower earners. 

Charging - cost and accessibility 

There are many benefits to charging an EV at home.

For one thing, it’s cheaper than charging at public stations with providers offering specific off-peak rates. It’s also more comfortable and convenient.

But not everyone can afford the installation of a home charger, or will be in the right circumstances to set one up. Home charging solutions rely on two assumptions – that you have off-road parking and that you own your property.

And as we are constantly reminded by the news, getting on the property ladder is no easy feat,  especially for those on lower income brackets without financial support from a wealthier family member prepared to help them out with a deposit.

Fuel prices, admittedly, have seen an increase in recent years with the cost of living, but if there’s one benefit of sticking with petrol, it’s that you don’t have to be homeowner with a driveway to top up at a petrol station.

While there is now help for flat-occupiers and renters to set up home-charging in the form of a government grant, those who don’t own property will still need to rely on permission from landlords to make use of it. Not ideal.

Those without access (or means) to set up home-charging are more likely to get stuck relying on the network of public charging stations in their vicinity.

Insurance costs

We know the cost of living is skyrocketing.

You’ve probably seen this reflected in your car insurance renewal recently, with premiums making insane jumps. Your driving behaviour hasn’t changed, you’re no bigger risk than you ever were – so why?

Expenses including parts, materials, repair, paint and energy costs are just some of the things driving up the price of policies. Basically, it’s inflation at work.

A drop in older drivers choosing electric cars

Believe it or not, we’re already seeing a disparity in who exactly is making the switch to EVs.

In 2023, we wrote about an alarming drop in drivers over the age of 55 switching to electric cars. At the time, just 26% of quizzed customers stated that switching to an EV was important to them.

And while there are barriers around EV ownership that may be specifically affecting this age bracket – a lack of trust in public charging, a belief that constant access to technology and apps is needed for instance – it now seems likely that affordability may also play a part.

With the gender pay gap being widest over the age of 40, it may be that many households in this demographic simply don’t feel they can afford to make the change. Especially as, according to new data from YouGov, up to 43% of households in the UK feel taking on a new car is a joint financial responsibility.

But we need EVs to be accessible to people from all walks of life if we are to successfully transition away from petrol and diesel vehicles.

We’ll be interested to see if EV leasing picks up among drivers aged 55+ once we start seeing the price of electric cars reach price parity with petrol equivalent models.

Thoughts on a fairer future

Ultimately, the gender pay gap affects all industries, not just the motor trade.

But economic inequality is a barrier that needs to be addressed if we are to build the fair and accessible industry we all deserve to benefit from.

It’s all very well and good to shout about women being empowered to make important financial decisions. But it’s only half the battle if those decisions are more limited than men’s in the first place.

Ultimately, we need the government and businesses to do more to address unequal pay in the UK. As wages go up and the price of EVs comes down, it will be easier and more affordable for a wider range of consumers to go green.

Which is what needs to happen if we want to meet the 2035 deadline banning the sale of new petrol and diesel vehicles.

And for those of us wanting a fairer, greener motor industry affordable electric car leasing is really the aim of the game.