Electric vehicles accounted for more than a quarter of all new cars bought in the UK last month but demand is being propped up by ‘unsustainable’ manufacturer discounts, the trade body has warned.
New car sales in the UK declined by 1.9 per cent in November, with 153,610 motors joining the road, latest figures from the Society of Manufacturers and Motor Traders reveal.
EV sales rose for an eleventh consecutive month – up 58.4 per cent – to represent 25.1 per cent of all new registrations – the highest share of sales battery cars have secured in a single month in almost two years.
In contrast, petrol and diesel car registrations fell by 17.7 and 10.1 per cent respectively in November.
However, industry bosses said the figures masked the sector’s ‘continued struggles’ to meet the Government’s aggressive Zero Emission Vehicle (ZEV) mandate targets introduced this year, with fines looming for manufacturers who fail to meet the designated quota.
The ZEV mandate, launched in January, is designed to force makers to increase their share of electric vehicle sales in each of the next six years as part of the phase-out of new petrol and diesel models from 2030.
For this year, the mandate requires that 22 per cent of every brand’s sales are fully electric, rising to 28 per cent next year and 33 per cent in 2026.
For 2024 so far, manufacturers as a whole are well short at just 18.7 per cent, the official figures show, despite offering discounts totalling £4billion as part of efforts to make EVs more appealing to drivers.
EV sales rose for the eleventh consecutive month in November, up 58 .4 per cent to 25.1 per cent overall, in contrast petrol and diesel car registrations fell by 17.7 and 10.1 per cent respectively, SMMT data shows
The ever-growing pressure of the ZEV mandate is dominating the new car market.
EV sales might have reached their highest market share since December 2022, but November is only the second month this year in which BEV uptake has exceeded the mandated levels.
And sales of battery powered cars are being driven by manufacturers slashing the price of new EVs in a bid to stimulate demand, experts suggest.
The SMMT says car makers have provided discounts amassing to £4billion in 2024 in a bid to kickstart demand.
Heavy discounting is just one of a number of industry tactics – from putting on dealer demonstrators to aggressively positioning the motability market and restricting sales of petrol cars – being used by beleaguered manufacturers who are committed to hitting 22 per cent sales of EVs this year in a vain effort to stimulate private demand.
But demand from private buyers is still falling below the expected level needed to hit the regulation targets.
The Zero Emission Vehicle (ZEV) mandate requires 22% of all car sales by major manufacturers to be EVs this year to escape punishing fines of £15,000 per model
New car sales declined by 1.9 per cent in November, with 153,610 motors joining the road
Uptake has been waning among EV private buyers for two years now, and demand fell by 3.3 per cent in November, meaning that fewer than four in 10 (38.1 per cent) of new registrations were electric
Uptake has been waning among EV private buyers for two years and demand fell by 3.3 per cent in November.
It means fewer than two in five (38.1 per cent) of new registrations among the general car-buying public were electric last month.
Even fleet sales, which represent the bulk (59.9 per cent) of the market, fell by 1.1 per cent to just 91,933 units.
In light of this, the industry now expects the UK’s EV market share to be 18.7 per cent in 2024, although a strong December performance could see it hit 19 per cent – still, however, a distance short of the 22 per cent requirement.
And according to the latest industry outlook, EV registrations will need to grow by an additional 53 per cent in 2025 if next year’s 28 per cent mandated target is to be met – equivalent to 90,000 more businesses and consumers making the switch.
New Automotive’s ZEV tracker shows that JLR’s parent company Tata and Toyota are the two manufacturers set to miss targets by the most
In order for electric car sales to be met, industry voices are calling on the government to ‘urgently reviews the market regulation and the support necessary to drive it,’ the SMMT said.
Mike Hawes, its chief executive, added: ‘Manufacturers are investing at unprecedented levels to bring new zero emission models to market and spending billions on compelling offers. Such incentives are unsustainable – industry cannot deliver the UK’s world-leading ambitions alone.’
Ford’s UK boss this week demanded a return of subsidies for EVs that were scrapped over two years ago in June 2022.
Lisa Brankin, UK chair of the car maker, said flagging demand needed to be boosted by a ‘substantial’ grant, or by another financial incentive like a cut to VAT on new EV prices.
The government recently met with industry leaders to discuss the ZEV mandate and ways to help beleaguered firms meet the strict thresholds introduced this year.
However, many parties aren’t with the government’s direction.
Fleet sales, that represent the bulk (59.9 per cent of the market), fell by 1.1 per cent to just 91,933 units last month
Going further in the widespread criticism of the Government’s EV sales targets, Jon Lawes, managing director at Novuna Vehicle Solutions, rubbished the ZEV mandate calling it ‘not fit for purpose’.
‘Industry still supports the ambition to ramp up EV adoption but there are two trade-off’s the government can no longer ignore,’ he said.
‘Policymakers must either revisit the structure of quotas but accept a slower transition, or soften penalties on manufacturers but accept the need for more adoption incentives.
‘The government needs to deliver a swift conclusion to its review, introducing more fiscal support and ending any disconnect with the 2030 ICE [internal combustion engine] phase-out timeline, which will otherwise continue weighing on the used-EV market.’
The ZEV mandate introduced in January and sets binding EV sales targets that increase annually over the next decade
There’s also a concern that announcements in the Autumn Budget VED tax increases will dampen EV demand for private buyers.
James Hosking, managing director of AA Cars said: ‘Shifting consumer priorities and broader economic pressures have stalled recovery, further impacted by the Autumn Budget’s tax increases.
‘These include inflation-linked Vehicle Excise Duty (VED) hikes from April 2025 and higher first-year rates, which have dampened buyer sentiment.’
Despite this the SMMT says that ‘with the right, responsive market regulation, however, the UK could hold a commanding position as an exemplar global market for a rapid zero emission transition’.
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