The Current State of the UK EV Market: Record Sales and Future Concerns
The UK's electric vehicle (EV) market has witnessed remarkable growth in September, where new car registrations surged to record levels. Demand for battery electric vehicles (BEVs) reached a historic high, contributing to a strong month for EV sales. According to the latest figures, sales of battery electric vehicles rose by 24.4%, with 56,387 units sold, capturing a 20.5% share of the overall market. Plug-in hybrid electric vehicles (PHEVs) also saw significant growth, with registrations increasing by 32.1%, taking an 8.9% market share, while hybrid electric vehicles (HEVs) saw a 2.6% rise, boosting their share to 14.2%.
Despite these impressive numbers, industry insiders have raised concerns regarding the government's targets for 2024. The Society of Motor Manufacturers and Traders (SMMT) has warned that the UK may miss its goal for zero-emission vehicle (ZEV) sales due to a lack of fiscal incentives for consumers. In a letter signed by SMMT chief executive Mike Hawes and 12 car company CEOs, they stated, “Unfortunately, the private consumer has no fiscal incentive to switch and so our ZEV market looks set to miss its target. The consequences of this will not just be environmental but economic.”
Looking ahead, the SMMT forecasts that new EV sales will account for only 18.5% of car sales by the end of 2024, falling short of the government’s ambitious target of 22%. This gap highlights the urgent need for the government to reassess its approach to incentives and support for EV adoption. Ahead of the Labour government’s first budget on October 30, car manufacturers have called on the Chancellor to provide more incentives to drive EV sales.
Their requests include:
Cutting VAT at public chargers to the domestic level of 5% instead of the current rate of 20%.
Mandating infrastructure targets to support those who cannot charge at home, ensuring access to charging points for all consumers.
Halving VAT on new car purchases to encourage more buyers to switch to EVs.
Extending business incentives, including lower Benefit in Kind rates for EV buyers, which would make electric vehicles more attractive for company fleets.
Renewing the plug-in van and taxi grants, which are set to expire in March 2025, to continue supporting these critical segments of the market.
By implementing these measures, the government can help bolster the EV market, ensuring that the UK not only meets its environmental commitments but also secures economic benefits from a thriving green automotive sector.