UK Motor Trade Cuts Sales Forecasts for Electric Cars

Private motorists are continuing to avoid the zero-emission car market.

At the beginning of the year, the Society of Motor Manufacturers and Traders predicted that 24 percent of all new vehicles registered in the United States would be zero emission vehicles.

This was higher than the 22 percent target set by the government in its zero-emissions vehicle mandate. The mandate requires that manufacturers sell a certain percentage of zero-emissions cars or risk facing punitive fines.

Electric cars will make up less than a fifth of all new car sales in 2019, or 19,8 percent.

Some manufacturers have already offered discounts due to the zero-emission mandate. Stellantis is the company that owns Vauxhall Peugeot Citroen Fiat. They slashed their prices up to 20% to increase sales.

According to the latest SMMT data, electric car sales in April rose by 10 percent year-on year and captured 16.9 percent of the total market. This is a rebound after a stagnation throughout the first quarter.

The figures reveal that just 15% of the electric cars sold are for private drivers — that’s only 2.5% of the market. The rest is going to businesses or fleets that get tax breaks on company cars.

The SMMT has cut its forecast for zero-emission vehicles due to the falling demand from private motorists. The SMMT stated that “long-term success is dependent on a market growing based on strong consumer demand for electric vehicles”.

Mike Hawes is the chief executive of SMMT. He said that “the absence of government incentives to private buyers has a marked impact.” Even though electric cars have attractive offers, manufacturers can’t fund the mass-market transition on their own.

He said: “Temporarily reducing VAT, treating electric cars as mainstream vehicles and not luxury vehicles, along with taking steps to instil confidence in the charging network, will drive market growth that is needed for Britain’s net-zero ambition.”

A weaker retail market for electric vehicles contributed to a slower new car market. In April, 134,000 new vehicles were registered. This is just 1% more than the previous year. This lowered the number of new cars registered in the first four month of the year. The figure was 679,000, which is an increase by 8.4% over the same period in 2023.

Cost of living, inflation and interest rates are all affecting the market. Private buyers accounted for 38 percent of new registrations in the first half of this year. This figure was higher than 46% in the same time period in 2023.

Ian Plummer is the commercial director of Auto Trader. The online motoring marketplace said that new car prices have increased by 29 percent on average since 2020. This has led to a price out-of-market risk for many consumers, as we can see in the flat retail registrations in April.

Electric vehicles are usually 35 percent more expensive than traditional fuelled petrol or diesel models. Batterie electric vehicle registrations are up since 2023, which is a testament to the discounts manufacturers have offered to encourage consumers to buy new electric cars. “We’ll still need to see more price reductions to achieve mass adoption.”

Richard Peberdy is the head of KPMG’s automotive consulting. He said that “consumer new car sales continue to be affected by household budget pressures, as well as higher costs of financing and insurance.” New car sellers discount to increase consumer growth and push new models onto the market.

The UK auto industry hopes that a fall in interest rates in the second half year will improve consumer confidence for the UK’s economy in the short- to medium-term. If the electric vehicle market share does not increase, the implications of the zero emission mandate will become more and more important as the year progresses.

According to the SMMT, the most recent data shows that the public network for charging electric cars is barely keeping up with the number of plug-in vehicles on the roads. Last year, there was only one public charging point per 36 plug-in vehicles on the road. This year, there is only one public charging point for every 36 plug-in cars.