Official figures show that the demand for electric cars has dropped sharply, as drivers have shifted to petrol and hybrid vehicles.
According to the Society of Motor Manufacturers and Traders, (SMMT), last month saw a decline in the market share of electric cars (EVs).
In March, the month that is usually the busiest for car sales in the year, the number of new EV registrations increased by only 3.8 percent.
The global car market has grown by 10% in the last year. More than half of the market’s sales were accounted for by petrol engines, which grew 9.2 percent. Plug-in hybrids saw a 37% increase. Plug-in hybrids, as a percentage of the market share, are declining.
SMMT stated that the gains made by EVs last month were almost entirely due to fleet and business purchases. Sales of ordinary cars are declining.
Mike Hawes is the CEO of the SMMT. He said that “a sluggish market for private cars and a shrinking market for electric vehicles” were signs of fundamental problems in a sector otherwise looking healthy.
He said: “Manufacturers offer compelling offers [to purchase electric cars], but they cannot fund the transition on their own indefinitely.
“A government support program for private consumers and not just businesses and fleets would send a good message and result in a quicker, more equitable transition that is on target and on time.”
The new mandate on electric cars (ZEV) that began in January has led to the disappointing results.
The automotive industry must make sure that 22% of its sales this year are EVs, a goal which experts warned was difficult to reach. The mandate will increase to 28 percent in 2025. It will then rise to 80 percent in 2030, and 100 percent in 2035.
If they fail to meet the target, carmakers will be fined £15 per vehicle over the threshold.
The market share of battery electric cars was 20 percent last summer, but it quickly dropped after Rishi sunak announced that the government would delay the ban of petrol or diesel cars until 2035.
Carlos Tavares is the CEO of Stellantis whose brands include Vauxhall Fiat Peugeot. He warned that EVs will never be popular with all drivers.
At the Freedom of Mobility Forum, Mr Tavares stated: “We need to move away from dogmatic thinking that assumes one size fits everyone. This is not going to work. What I’d like to add is the fact that some of our societies can benefit from the current EVs.”
EVs typically cost at least 50% more than petrol-powered equivalents. This means that the segment is much more sensitive to consumer sentiment. High inflation, high interest rates and mixed messages from government have all contributed to a decline in sales.
NimbleFins’ personal finance comparison website says that the average price of a new car electric is around £50,000. Prices range from £22,220 to £157,000. It put the average cost of a new petrol vehicle at £19,000-£32,000.
NewAutoMotive’s green motoring consulting firm, in a recent report, predicted that the electric vehicle market could restart this year, with price cuts of double-digit percentages.
The manufacturers will be forced to reduce the price of some models by up to £10,000 as a result of the ZEV mandate, and the arrival of Chinese brands , which, though not cheap, are likely to undercut European manufacturers.
A Department for Transport spokesperson said: “The overall number of electric vehicles and plug ins sold is higher than it was last year. This is partly due to government grants in the past decade and £2 billion investment, as well as ongoing tax incentives.”
The number of electric vehicles on our roads has now surpassed a million, and we are continuing to encourage more people to switch to electric by implementing schemes like the Local Electric Vehicle Fund (£381 million) to build charging infrastructure.