THE UK new car market grew 14.7% in January to reach 131,994 units, the best start to the year since January 2020’s pre-Covid and the sixth successive month of expansion
According to the latest figures from the Society of Motor Manufacturers and Traders electrified vehicles notably drove the increase, as manufacturers continue to bring ever more choice to the market despite ongoing strains on the supply chains.
Hybrid electric vehicles (HEVs) comprised 14.4% of new car registrations, increasing volumes by 40.6%. Meanwhile, battery electric vehicle (BEV) registrations rose 19.8% to reach 17,294 units, or 13.1% of new registrations – slightly below the average recorded for 2022. Plug-in hybrid vehicles (PHEVs) recorded a 0.7% rise, although their share fell to 6.9% of new cars reaching the road. As a result, one in five new cars registered in the month came with a plug.
Plug-ins are anticipated to comprise of more than one in four new registrations this year, representing growth of 32.1% or approximately 487,140 units, and almost a third (31.0%) of the market in 2024 at 607,150 units. However, the rollout of infrastructure needed to charge them is failing to keep pace.
During Q4 2022, the ratio of new chargepoint installations to new plug-in car registrations dropped to one for every 62 – a significant fall compared with the same quarter last year, when the ratio was 1:42. As a result, in 2022, one standard public charger was installed for every 53 new plug-in cars registered, the weakest ratio since 2020.
Mandating rollout targets for infrastructure and regulating service standards would give drivers certainty they can always find a working, available charger. Infrastructure must be built ahead of demand else poor provision risks delaying the electric transition.
The SMMT said the upcoming Budget is an opportunity to implement measures that support the transition. Reducing VAT on public chargepoint use from 20% to 5% in line with home charging would ensure more affordable access for all and underpin a fair net zero transition.
It added that Government should also review proposals to graft a Vehicle Excise Duty regime designed for fossil fuel cars onto zero emission vehicles (ZEVs). The higher production costs associated with electric vehicles means that currently more than half of all available BEVs would be subject to the expensive car supplement due to apply to ZEVs from 2025.
While it is right that all drivers pay their fair share, existing plans would unfairly penalise those making the switch, and risk disincentivising the market at the time when EV uptake should be encouraged. Government should also tackle other fiscal blocks to uptake by raising recommended business mileage rates.
The strong start to the year is mirrored in the latest market outlook, which anticipates 1.79 million new car registrations in 2023, an 11.1% increase on the past year but still well below 2019 levels. This also represents a 0.8% reduction on October’s outlook, against a weak economic backdrop. However, a further 9.3% increase is expected next year, with 1.96 million new cars expected to join the road in 2024.
Kim Royds, EV Director at British Gas, said: “Maintaining the momentum in the number of EVs arriving on UK roads is not going to be an easy ride without boosting the levels of investment in the charging network.
“It is vital that the government increases the pace at which public chargers are being installed across the country. What’s more, it needs to work with organisations and public authorities to maintain these services, and ensure they are accessible to those without off-street parking that need them the most.
“Ultimately, we need drivers to have the confidence that there are enough chargepoints for them to use if the UK’s EV revolution is to gather pace. If not, we may see a tipping point where the supply of vehicles outstrips the number of chargers available, stalling the good progress that has already been made.”
Cox Automotive believes that a lack of infrastructure to support more EV purchases, discussions surrounding the agency model and the rise of Chinese brands in the UK and Europe could all change the shape of the sector for years to come.