Last month saw car makers almost meet the government sales mandate that 28% of new vehicles be electric, with the 21,969 EVs finding homes in August representing a 26.5% market share.
That’s up from 22.6% in August 2024, and a rise from 21.3% in July this year, with the sharp rise on the previous month likely due to the Electric Car Grant (ECG), which uses taxpayer cash to knock up to £3,750 off the price of a new battery-powered vehicle.
A total of 82,908 new cars were registered in August, and while the new grant, announced in July, is thought to have boosted EV sales, year-to-date just 21.9% of new cars have been powered by batteries alone.
This means that at the end of the year car makers are likely to face penalties of £15,000 per petrol/diesel/hybrid car sold over quota – though manufacturers can escape these fines by buying EV ‘credits’ from companies that exceeded the 28% target; firms benefiting from selling credits are likely to be pure EV players like Tesla and BYD. The mandate rises to 33% in 2026, 38% in 2027, 52% in 2028, 66% in 2029, and 80% in 2030.
The Electric Car Grant was launched with much fanfare, and is the first retail incentive to have been introduced since the Plug-in Car Grant was axed in 2022.
The new scheme offers buyers two levels of discount on electric vehicles, with a £1,500 bung for some cars, and a £3,750 reduction for others.
Complex eligibility criteria mean cars have been slow to be added to the scheme, and while 33 vehicles currently get the £1,500 discount, just two are eligible for the higher rate: the Ford Puma Gen-E (official range: 233 miles), and the Ford E-Tourneo Courier, an MPV that can officially cover just 177 miles from full to empty.
Cars must cost no more than £37,000 to qualify for the scheme, while manufacturers must also demonstrate their businesses comply with environment requirements set by the government. Firms must show: a commitment to Net Zero by 2050; that they’re targeting a 42% reduction in 2020 emission levels by 2030; and transparent supply-chain reporting for batteries and other components.
The form manufactures must complete to apply for a vehicle to be added to the Grant runs to 10 pages and 1,600 words, while the guidance document stands at over 6,000 words.
Car makers must also supply exhaustive evidence to accompany each application, including a certificate proving corporate sustainability. These certificates are issued by The Science Based Targets initiative (SBTi), which the government says is “an independent body that assesses corporate sustainability plans”. SBTi is a London-based registered charity and limited company headed by a former partner at Ernst & Young who was also the founding chief executive of the Committee on Climate Change, and worked as a director at the Department for Environment, Food and Rural Affairs.
Commenting on the latest registration figures, Mike Hawes, chief executive of the SMMT, says: “August was the best month yet this year for EV market share and, while it is often volatile due to low overall volumes, the overall trend is positive. September will be critical, with the new number plate factor typically driving around one in seven new car registrations for the year.”
He continues: “There is now a vast choice of electric models across all segments and many consumers will also, for the first time in three years, benefit from a grant to help them switch to electric. With more models being added to the government’s Electric Car grant each week, there is now every reason for drivers to make the switch, helping deliver both economic growth and decarbonisation.”
