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According to the latest data from the Society of Motor Manufacturers and Traders (SMMT), the new car market in the UK saw a slight increase of 1.0% in September, coinciding with the key ‘74’ plate change, resulting in a total of 275,239 units sold. This month is historically strong for new registrations, ranking just behind March, and marked the best performance since 2020. However, it remains 19.8% lower than the figures recorded in September 2019 before the onset of the Covid pandemic.1
The growth in sales was primarily driven by fleet purchases, which rose by 3.7%, reaching 149,095 units and accounting for 54.2% of the overall market. Meanwhile, private consumer demand decreased by 1.8%, totaling 120,272 units and representing 43.7% of registrations, and the small business sector experienced an 8.4% decline, with only 5,872 units sold.
Plug-in hybrids (PHEV) experienced the fastest growth among fuel types, increasing by 32.1% to capture an 8.9% market share. Hybrid electric vehicle (HEV) registrations rose by 2.6%, boosting their share to 14.2%. In contrast, registrations for petrol and diesel vehicles fell by 9.3% and 7.1%, respectively, although they still accounted for 56.4% of purchases in September.
The demand for battery electric vehicles (BEV) reached an all-time high for the month of September, jumping 24.4% to 56,387 units, which translates to a 20.5% market share compared to 16.6% the previous year. Despite this growth, the overall market share for BEVs only slightly increased from 17.2% during the first eight months of the year to 17.8% from January to September, with expectations to hit 18.5% by year-end.
Much of this increase was driven by fleet registrations, which surged by 36.8%, constituting over three-quarters (75.9%) of BEV registrations. Private demand for BEVs also saw a 3.6% rise due to significant manufacturer discounts, leading to just 410 additional registrations. Conversely, consumer interest in diesel vehicles rose at a greater pace, with a 17.1% increase in September resulting in an uplift of 1,367 units.
Despite the increase in September, private demand for BEVs year-to-date has declined by 6.3%, highlighting the challenges of transitioning the mass market to meet mandated targets established under vastly different economic and market conditions. Prior expectations of steady BEV growth alongside affordable raw materials, low energy costs, and interest rates have not materialized, compounded by consumers’ lack of confidence in the UK’s charging infrastructure. Even with recent investments and advancements, charging access remains a significant hurdle for wider BEV adoption.
To counteract this ongoing demand deficiency, SMMT estimates that manufacturers are slated to spend at least £2 billion on EV discounts this year.2 Considering the substantial investments already made to develop and market these vehicles, this situation is unsustainable and jeopardizes both manufacturers and retailers. Consequently, SMMT, along with 12 leading vehicle manufacturers representing over 75% of the market, has reached out to the Chancellor advocating for measures that would support consumers and accelerate the EV transition. Among these suggestions are:
- Temporarily reducing VAT on new EV purchases to encourage over two million new ZEVs (zero-emission vehicles) on the road by 20283
- Eliminating the VED ‘expensive car’ tax supplement for ZEVs, set to take effect next year to prevent penalizing buyers
- Standardizing VAT on public charging to match the 5% rate applied to home charging and setting infrastructure targets for those unable to charge at home
- Continuing and enhancing beneficial business incentives, such as the Benefit in Kind for company cars and salary sacrifice schemes, along with the essential Plug-in Van Grant
Mike Hawes, Chief Executive of SMMT, stated,
While September’s record performance for electric vehicles is positive, a closer inspection reveals significant issues, as the market isn’t expanding swiftly enough to meet mandated targets. Despite manufacturers investing billions in product development and market support—support that is not sustainable in the long term—weakness in the market threatens environmental objectives and future investments. We recognize the constraints on public finances, but the Chancellor must seize the upcoming Budget as an opportunity to introduce bold consumer support measures and infrastructure advancements to realign the transition and foster both economic growth and environmental benefits.
1 343,255 registrations in September 2019
2 £2 billion estimate based on the average discount reported by Auto Trader for BEVs in September of 12.1% applied to the average retail price of a new BEV (£49,600, according to JATO data), aligned with SMMT’s total BEV market projection of 364,000 units. This figure excludes finance offers or incentives provided to large fleets.
3 Calculations by SMMT
SOURCE: SMMT
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