EV want very important enhance as new automotive market information greatest month-to-month figures for twenty years
Gross sales of latest electrical vehicles held their very own in the course of the historically gradual month of February though the section nonetheless wants an important fiscal enhance if the non-public purchaser is to be satisfied to make the change.
Battery electrical automobile share really grew in the course of the low-volume month when gross sales fall in readiness for the brand new quantity plate month of March, in response to the most recent figures from the Society of Motor Producers and Merchants (SMMT).
The uptick in electrical gross sales was accompanied by the information that the brand new automotive market recorded its greatest February for 20 years, with new automotive registrations rising 14% to 84,886 items.
It was the nineteenth month of consecutive progress, pushed solely by fleets investing within the newest automobiles. Certainly, fleets and companies with registrations up 25.2% and 15.5% respectively.
Electrified automobiles recorded sturdy progress, with hybrid electrical automobiles (HEVs) rising 12.1%, however taking a slightly smaller year-on-year market share of 12.7%. Plug-in hybrids (PHEVs) recorded the biggest proportional progress for the month, rising 29.1% to succeed in 7.2% of the market.
Battery electrical automobile uptake equally outpaced the remainder of the market, rising 21.8% to account for 17.7% of registrations, an enchancment on final yr’s 16.5%.
The SMMT mentioned that whereas February’s progress is optimistic and demonstrates sturdy demand for the most recent automobiles, the long-term image will grow to be clearer in March, the busiest market month.
It famous that whereas the BEV market share and volumes proceed are set to develop in the course of the first yr of mandated targets for producers, future progress is unsure as the rise in uptake is at the moment being sustained by fleets, as a result of tax breaks on provide.
Certainly, non-public uptake continued to wrestle with a -2.6% decline to document a 33.7% market share with patrons accounting for fewer than one in 5 (18.2%) new BEVs registered in 2024 thus far.
This fall-off has prompted business to name for fairer EV taxation to reverse the decline in non-public EV uptake.
“A quicker, fairer market transition is dependent upon extra non-public patrons switching however the lack of great incentives is holding again many,” mentioned the SMMT.
“Tomorrow’s Price range is a chance for the Chancellor to stimulate demand by halving VAT on new EVs for 3 years, amending proposed Automobile Excise Responsibility (VED) modifications, and decreasing VAT on public charging in keeping with dwelling charging.”
It identified that whereas customers don’t pay VAT on different emission discount applied sciences equivalent to warmth pumps and photo voltaic panels, non-public EV patrons pay the total 20% levied on all vehicles, whether or not they be electrical, petrol or diesel. Halving VAT on new EV purchases would save the typical purchaser round £4,000 off the upfront buy value – but price the Treasury lower than the Plug-in Automobile Grant that was scrapped in 2022.
Equally, upcoming modifications to Automobile Excise Responsibility subsequent yr would see the vast majority of BEV patrons successfully penalised £1,950 for going electrical as a result of ‘costly automotive’ complement. Moreover, these unable to cost a BEV at dwelling at the moment pay a ‘pavement penalty’ of 20% VAT on public charging – quadruple the speed paid by these with the chance to cost at dwelling.
Mike Hawes, SMMT chief govt, mentioned: “This week’s Price range is a chance to make sure that progress is greener. Tackling the triple tax barrier because the market embarks on its busiest month of the yr would enhance EV demand, slicing carbon emissions and energising the financial system. It should ship a quicker and fairer zero emission transition, placing Britain’s EV ambition again within the quick lane.”
“February’s figures reinforce the sturdy efficiency of the UK automotive sector, sustaining a robust begin to 2024 and signalling a nineteenth month of consecutive progress,” mentioned Sue Robinson, chief govt of the Nationwide Franchised Sellers Affiliation (NFDA), which represents franchised automotive and business automobile retailers within the UK.
“It’s promising to see that electrical gross sales proceed to develop after a bounce again final month, significantly as OEMs search to fulfill the targets set by the ZEV mandate for this yr. Regardless of encouraging progress, it’s essential that the Authorities continues to work with sellers to realize one of the best outcomes for customers.”
Ian Plummer, business director of Auto Dealer commented: “As we’ve highlighted since final summer time, we’re seeing very clear indicators of the brand new automotive market absolutely pivoting and returning to a ‘push’ mannequin. Producers going through a difficult mixture of latest regulatory targets, softening retail gross sales, and elevated stress from new manufacturers, have little alternative however to show to substantial affords to stimulate flat retail demand and entice patrons.
“That is already enjoying by way of on our market; new automotive advert views had been up 38% YoY to six.6m in February. By the tip of the month, we noticed an particularly sturdy uplift in EV enquiries, doubling to twenty% with some producers providing vital reductions to tempt patrons.
“This contains the Honda e:Ny1, with headline affords that fell beneath £200pcm, serving to it to take round 12.5% of all new EV enquiries in February. Clearly, such a robust message of affordability is popping many automotive patrons’ heads. Common EV reductions stay round 10%, however because the stress to attain the strict ZEV Mandate goal begins to tighten, this form of excessive discounting dangers turning into extra widespread.
Lisa Watson, director of gross sales at Shut Brothers Motor Finance, famous that its analysis indicated that solely 12% of patrons are planning to buy an electrical automotive – down from 14% final yr though aggressive pricing by Chinese language electrical automobile (EV) manufacturers might make EVs extra interesting to non-public patrons.
Responding to the February new automotive gross sales figures, Richard Peberdy, UK head of automotive for KPMG, mentioned: “Ongoing stress on family budgets and a better price of automotive finance imply that it’s nonetheless a troublesome financial interval for many individuals wanting to purchase a brand new automotive, and a problem for these making an attempt to promote them. Total, the UK market continues to carry up comparatively effectively to this problem, boosted by flowing provide of latest automobiles, discounting on many forecourts, and export demand.
“Whereas the used EV market is rising, gross sales progress of latest EVs to customers has plateaued. Many within the automotive business wish to this week’s Price range and hoping that demand might be stimulated by the likes of slicing VAT on EV buying and at public cost factors. Growing EV gross sales is now all of the extra essential after the Zero Emission Automobile Mandate started this yr.”
