Electric Vehicle Sales Surge, But Why Aren’t Private Buyers Interested?
The UK new car market rose 1.0% in the key ‘74’ plate change month of September, to 275,239 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). The sales figures were the best since 2020, but still -19.8% off pre-Covid September 2019.
However, growth was driven by fleet purchases, up 3.7% and representing 54.2% of the overall market. Private consumer demand actually fell, by -1.8% to 120,272 units, accounting for 43.7% of registrations, while the smaller business sector also saw volumes fall -8.4% to 5,872 units.
Electrified vehicles sales did grow, as uptake of plug-in hybrids (PHEV) rose faster than any other fuel type in the month, up 32.1% to take an 8.9% share of the market. Hybrid electric vehicle (HEV) registrations rose 2.6%, boosting market share to 14.2%.
Electric Vehicle sales (BEV) hit a new record up 24.4% to 56,387 units, achieving a 20.5% share of the overall market (up from 16.6% last year). However BEV market share overall is only set to reach 18.5% by the end of the year, well short of the 22% required by the ZEV mandate this year.
Meanwhile petrol and diesel registrations were down by -9.3% and -7.1% respectively, although together they were still the choice of 56.4% of buyers in September.
Electrified sales were bolstered by fleet sales accounting for for 75.9% of BEV registrations. Private BEV demand also rose, up 3.6% due to unprecedented manufacturer discounting, but in reality that’s only another 410 additional registrations.
Bucking recent trends, consumer demand for diesel actually grew increasing 17.1% in September – a volume uplift of 1,367 units.
With the upfront cost of BEV models remaining stubbornly high, added to consumers’ lack of confidence in the UK’s charging provision the SMMT calculates that manufacturers are on course to spend at least £2 billion on discounting EVs this year.
Given the many billions already invested to develop and bring these models to market, the situation is untenable and threatens manufacturer and retailer viability.
SMMT and 12 major vehicle manufacturers representing more than 75% of the market, have today written to the Chancellor calling for measures to support consumers and help speed up the pace of the EV transition.
These include:
– Temporarily halving VAT on new EV purchases to put more than two million new ZEVs (rather than petrol or diesel) on the road by 20283
– Scrapping the VED ‘expensive car’ tax supplement for ZEVs, due next year, to avoid penalising buyers
– Equalising VAT on public charging to match the 5% home charging rate, and mandating infrastructure targets to support those who cannot charge at home
– Maintaining and extending the business incentives that are working, including Benefit in Kind which supports company cars and those on salary sacrifice schemes, and the important Plug-in Van Grant
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