The UK is seeing another surge in demand for electric vehicles, with the country now having surpassed one million registrations for battery electric vehicles, according to the Society of Motor Manufacturers and Traders (SMMT).
Despite fears that the cost of living crisis and the removal of grants would impact the sale of electric vehicles in the UK, it seems that the market has managed to buck the trend – although not everything is as peachy as it would seem. The new car market as a whole experienced a robust start to the year with an overall growth of 8.2%, totaling 142,876 new registrations.
This uptick in sales, the strongest since 2020, was largely driven by the fleet sector, which saw a 29.9% increase, significantly outpacing private retail sales that declined by 15.8%. Fleet purchases now represent over 63% of new car registrations, highlighting a shift in buying patterns towards corporate and large-scale buyers.
Battery electric vehicles (BEVs) led the charge in sustainable mobility, with 20,935 units registered in January alone—a 21% increase compared to the previous year. This surge in BEV registrations brought the total number of electric cars on UK roads to 1,001,677 since records began. However, despite this growth, BEVs accounted for 14.7% of the market share in January, slightly below their performance in 2023.
The rise in electric vehicle sales comes at a time of anticipated supply volatility, as manufacturers adjust to recent UK-EU trade agreements that threatened to impose tariffs on EVs, potentially affecting affordability. The fleet and business sectors have shown a strong demand for BEVs, growing by 41.7% in January, while registrations by private buyers dropped by 25.1%, indicating a need for increased support to encourage individual consumers to transition to electric vehicles.
Amidst calls for more substantial consumer incentives to promote EV adoption, the automotive industry is urging the Government to consider measures such as temporarily halving VAT on new BEV purchases in the upcoming Budget. This proposal aims to not only accelerate the shift towards electric vehicles but also to replicate the success seen with other carbon reduction technologies, enhancing the used EV market and making the UK more attractive for charging infrastructure and manufacturing investments.
As the UK automotive sector anticipates further growth in electric vehicle sales, the spotlight remains on Government policies and incentives to support this transition, crucial for achieving net zero emissions and fostering sustainable economic growth.