Electric vehicle demand is dampened by energy costs and charging station anxiety

After a trade association downgraded their forecast for demand, new concerns have been raised regarding efforts to boost the sales of electric vehicles.

The Society of Motor Manufacturers and Traders’ (SMMT) believes that high energy costs and inadequate charging infrastructure will reduce the demand for battery electric vehicles this year.

The market share was predicted to fall from 19,7 percent of new cars down to 18,4 percent. The forecast for next year was reduced from 23.3% to 22.6%.

The SMMT stated that in order to increase consumer confidence and accelerate the demand, “greater investments and faster infrastructure investment” as well as “greater incentives to purchase” were required.

Manufacturers must begin ensuring that by next year, at least 22% of all new cars and 10% of new vans will be emission-free. The percentage will increase incrementally each year to 80 percent for cars, 70 percent for vans and 100 percent for both by 2035.

Mike Hawes is the chief executive of SMMT. He said that “the new car market has become increasingly bullish as easing pressures on supply chains provide a much needed boost.” The market is beginning to be affected by the wider economic conditions, as well as chargepoint anxiety.

He said: “To ensure that all drivers benefit from electric cars, we need everyone – government, local authority, energy companies, and charging providers — to accelerate their investments in the transition and boost consumer confidence in the switch.”

John Wilmot is the chief executive at the leasing comparison site LeaseLoco. He said that while the electric car market was “at the heart of a sustained improvement in new car sales”, a fall in the market share, from 16.2% in March to 15% last month, could be an indication that the demand for electric vehicles may be declining.

He said that Tesla had recently cut its prices, which forced other automakers to follow suit. “Price is always a barrier for consumers to buy electric cars. Many models are expensive.”

The UK will ban the sale of new petrol or diesel cars from 2030. According to the SMMT, Britain may have the technical expertise, research and development capabilities, and a supply network ready to grow, but lacks the economic and political backing needed to make the electric vehicle revolution a success.

The report said that US and European competitors, in particular were boosted by green tax breaks and subsidies, and without an equivalent response from the Treasury British carmakers wouldn’t be able compete in what they called a “global competition”. It was reported in March that the ministers were doing little to help British jobs. Only 32 of the 680 plug in vehicles purchased or leased by government’s central Fleet were British.

This year, new electric car registrations will likely fall.

Last month, the new car market as an entire continued to recover from the impact caused by the pandemic. It recorded its ninth consecutive month in growth. The increase of 11,6% to 132.990 registrations is the highest April figure since 2021 but down 17.4% from figures for 2019.

The SMMT reported that, while registrations for large fleets grew by a quarter to 68 537 vehicles, as the market “naturalised”, following weaker figures in 2017, deliveries to private buyers dropped by 5.5% to 61 342 cars. The SMMT said that registrations for small business fleets increased by 13.3% to 3,111.

Battery electric cars remained second in popularity behind petrol. They increased by 59 percent to 20,522 vehicles. The number of plug-in hybrids increased by a third, to 8,595 cars, while hybrid electric vehicles registered 15,026 cars, representing an increase of 7.7%.

The overall car market grew 16.9% in the first quarter of this year. This is the best start to a quarter since the pandemic. Sales growth was worth PS3.2 billion. The SMMT has revised its quarterly market forecast, with 1,83 million cars being expected to be registered by 2023. This is up from the 1.79 million that were predicted in January. This would be the largest increase since 1983.

In April, the SMMT data showed that there were 22,665 new light commercial vehicles registered. This is the fourth consecutive month of growth.