The body representing car makers says electric vehicle sales are growing too slowly to meet government targets and is calling on ministers for incentives to boost sales.
This is despite record registrations of battery electric vehicles (BEV) last month at 56,387, something the Society of Motor Manufacturers and Traders attributes to “unprecedented discounting” by the industry.
“September’s record EV performance is good news but look under the bonnet and there are serious concerns as the market is not growing quickly enough to meet mandated targets,” says SMMT chief executive Mike Hawes.
“Despite manufacturers spending billions on both product and market support – support that the industry cannot sustain indefinitely – market weakness is putting environmental ambitions at risk and jeopardising future investment. While we appreciate the pressures on the public purse, the Chancellor must use the forthcoming Budget to introduce bold measures on consumer support and infrastructure to get the transition back on track, and with it the economic growth and environmental benefits we all crave.”
It comes as the SMMT reported a 1% increase in registrations to 275,239 units during September, traditionally the second busiest month for car dealers, after March, because of the plate change.
BEVs made up 20.5% of the market during the month. Year to date they account for 17.8% of registrations and the SMMT is forecasting that to rise to 18.5% by the end of the year. However, it says this is still below the zero-emission vehicle mandate.
The industry is most worried about sluggish EV sales to retail consumers, with fleet customers making up the bulk of transactions. Noting that sales of diesel vehicles to private buyers outstripped those of EVs, the SMMT is calling for “urgent consumer support” from the government.
Private BEV demand is down 6.3% year-to-date, underlining, says the SMMT, “the scale of the challenge involved in moving the mass market to meet the mandated targets that were conceived in very different economic, geopolitical and market conditions”.
It adds: “Previous assumptions of a market delivering steady BEV growth, cheaper and plentiful raw materials, affordable energy and low interest rates have not come to fruition, with the upfront cost of BEV models remaining stubbornly high. Added to this is consumers’ lack of confidence in the UK’s charging provision – despite recent investment and growth – which still acts as a barrier to BEV take up.”
There is good news for the forecourt sector in that new car registrations overall were the highest they have been since 2020. However, the total is still almost a fifth behind September 2019, the year before the pandemic lead to a massive decline in commuting and business and personal travel by road.
Fleet purchases represented 54% of the overall market and were up by 3.7%, while private consumer demand fell by 1.8%.
Plug-in hybrids led the charge in the broader EV segment, growing by 32.1% to an 8.9% share of the market, a faster increase than any other fuel type. Meanwhile hybrid electric vehicle registrations (where the combustion engine charges the battery) rose 2.6% to take the market share of that type to 14.2%.
The SMMT calculates that manufacturers are on course to spend at least £2 billion on discounting EVs in 2024. The organisation describes this as “untenable”, suggesting it “threatens manufacturer and retailer viability”.
It is calling for a series of measures from the government, including:
- · A halving of VAT on new EV purchases
- · Scrapping the VED tax supplement for zero-emission vehicles that is due to come into force next year
- · Bringing VAT on public charging into the 5% charged to home users and mandating infrastructure targets to increase numbers of public chargers
