More than 20% of new cars registered in the UK last month were electric, according to the latest industry figures. The growth in battery electric and hybrid vehicle sales in August led to the lowest share of petrol and diesel purchases ever recorded, with just over 60% of cars registered being powered solely by a combustion engine. However, experts caution that the data does not provide the full picture. Auto Trader states that the surge in demand for electric vehicles is primarily driven by fleets rather than individual buyers. The median price tag of £50,000 for a new electric car is prohibitively expensive for many drivers.
The Society of Motor Manufacturers and Traders (SMMT) reports that the new car market in the UK grew by 24.4% in August. A total of 85,657 new cars were registered last month, compared to 68,858 in August 2022. Although August is typically a quieter month for car sales, with many buyers waiting until the following month to make purchases, an increase of 16,799 units indicates that the sector is experiencing a second year of growth as the motor industry continues its recovery from the pandemic and supply shortages. Despite the improved performance, the market is still 7.5% below pre-pandemic levels, when a total of 92,573 new cars were registered in the same month in 2019.
Demand for electric and hybrid vehicles continues to grow. In August, 20.1% of all car registrations were for battery electric models, and when combined with hybrid vehicles, they accounted for almost 40% of new cars on the road. Petrol and diesel cars had their worst month on record in terms of market share. Mike Hawes, CEO of the SMMT, stated that “recovery is underway with EVs (electric vehicles) energising the market.”
The strong increase in electric vehicle sales is evident in the top 10 best-selling new cars, which includes Tesla’s Model Y and Model 3. The Ford Puma topped the sales charts, maintaining its position as the UK’s favorite new model of 2023, followed by the Vauxhall Corsa. The Ford Fiesta, despite being discontinued earlier this summer, remains in high demand.
However, the headline figures on EV sales do not fully reflect the true demand in the market. Ian Plummer, commercial director at Auto Trader, reveals that while fleet sales are rising significantly, retail sales are softening, indicating pressure on consumers. He attributes the growth in EV sales to the availability of tax benefits for businesses, as the current median price of £50,000 for a new electric car is beyond the reach of most individual buyers.
Ginny Buckley, Founder and CEO of EV website Electrifying.com, expresses concern that sales of electric cars are predominantly made up of buyers of premium models. While an oversupply of cars and September deals could make electric vehicles slightly more affordable, the SMMT believes that the introduction of a Zero Emission Vehicle (ZEV) mandate is necessary to drive down the cost of battery models. The UK government plans to implement the ZEV mandate from next year, requiring 22% of all mainstream car sales to be electric. This requirement will gradually increase each year until 2035, when all vehicle sales must be fully electric. The hope is that this will encourage auto manufacturers to introduce more affordable electric models.
However, there has been no final decision on the ZEV mandate, and industry experts are calling for certainty and the necessary infrastructure and incentives to support the transition to electric vehicles. The government has launched a consultation on the ZEV mandate, and the results are expected soon. It is crucial for the UK to invest in charging infrastructure and provide financial incentives to encourage consumers to choose low-emission vehicles.
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