9:23 am, February 5, 2024
The UK passed an important milestone in January by registering the one millionth new EV during a strong month for new car registrations.
Latest figures from the Society Manufacturers and Traders (SMMT) show a huge uplift in the number of battery electric vehicles (BEVs) hitting the roads recently. For comparison, only around 674,000 pure BEVs were licensed in the UK by the end of 2022.
January saw 20,935 BEVs registered, taking the overall total of BEV registrations to 1,001,677 since records began in 2002.
The SMMT expects pure battery electrics to account for more than one in five new cars registered this year.
Importantly, however, January continued the trend of fleets accounting mostly for the growth in BEV registrations.
Fleet and business demand for BEVs grew by 41.7% in January, but registrations by private buyers fell by 25.1% – ‘an ongoing trend that will undermine Britain’s ability to deliver net zero’, said the SMMT.
The body has renewed its call to temporarily reduce VAT on EVs to spur more private buyers to switch to BEVs.
SMMT chief executive Mike Hawes said: ‘It’s taken just over 20 years to reach our million EV milestone – but with the right policies, we can double down on that success in just another two.
‘Market growth is currently dependent on businesses and fleets. Government must therefore use the upcoming Budget to support private EV buyers, temporarily halving VAT to cut carbon, drive economic growth and help everyone make the switch.
‘Manufacturers have been asked to supply the vehicles, we now ask government to help consumers buy the vehicles on which net zero depends.’
Meanwhile, January overall saw new car registrations jump by 8.2%.
The month saw 142,876 new cars registered, an uplift of 10,882 units on January 2023 – the best performance for the month since 2020 and the 18th consecutive month of growth.
The growth was driven entirely by fleets, though.
Fleet registrations rose by 29% while private registrations fell by 15.8%.
BEV market share for January grew year on year to 14.7%, although this is below the full 2023 performance of 16.5%.
Plug-in hybrids (PHEVs) recorded volume growth of 31.1% to take 8.4% of the market, while hybrid (HEV) volumes fell 1.2% with a 13.1% share.
The Kia Sportage was January’s top-seller with 4,239 registrations, followed by the Ford Puma (4,201) and the Nissan Qashqai (4,008).
What the industry thinks
More ministers can do
Britain’s millionth new electric vehicle sale is a real milestone moment for the market. Considering the pressure on car manufacturers to meet a 22% electric vehicle sales target under the ZEV mandate this year it’s a good time to be an electric vehicle buyer with some manufacturers offering EV discounts as high as 40%.
Electric vehicles may account for one in five sales this year but there is still more ministers can do. Equalising the VAT on private and public charging points would boost running cost savings and encourage more people to make the switch to electric.
Ian Plummer, commercial director, Auto Trader
Calls to cut VAT not a surprise
Household budgets continue to be squeezed, and the cost of car finance remains elevated. This remains a challenging environment for growing consumer new car sales volumes, but good supply of new vehicles, and discounting of many models, is helping car dealers to keep volumes flowing.
This economic landscape is also leading more people to look towards the used market – which has grown its stock levels after the pandemic years of shortage. The evolving used electric vehicle market is also providing more options for those consumers looking to transition to an EV – some of whom will have been deterred from buying a new EV due to the scale of price depreciation that has been witnessed.
With the Zero Emission Vehicle Mandate having begun, the pressure on manufacturers to increase new EV sales has increased. It’s not surprising to see a ramping up of calls from within the automotive industry for government to again look at grant incentivisation for consumers making the switch to an EV, plus a reduction in the level of VAT being paid when using public charge points.
Richard Peberdy, UK head of automotive, KPMG
A bright start to 2024
The new car market has started the year brightly, building on the incredible momentum it achieved in 2023.
The remarkable 18 straight months of rising sales have coincided with a 17% surge in UK vehicle production. More than a million new vehicles rolled off British production lines in 2023, helping make supply shortages look like a thing of the past.
The shorter wait time between drivers choosing a car and receiving the keys will have encouraged more people to commit to a purchase despite the turbulent economic climate.
Although January’s surprise uptick in consumer inflation may mean interest rates come down more slowly than hoped, sentiment is holding up well and buyer demand should keep the new car market moving forward smoothly.
With the new registration plates just around the corner, dealers will be optimistic that they can keep sales on a positive trajectory into the spring.
James Hosking, managing director, AA Cars
Government must play its part
The government must also play its part by stimulating demand at scale and making zero-emission driving more affordable. We urge the chancellor, in March’s budget, to reintroduce a form of the plug-in car grant aimed at the cheaper end of the EV market and cut VAT on public chargers to match the 5% rate levied on domestic electricity.
This would make charging significantly more affordable for those who can’t charge at home or those who regularly have to recharge on long journeys.
Simon Williams, head of policy, RAC
