August boost for EV market but regulatory uncertainty threatens future ambitions
On September 5th, 2023, the Society of Motor Manufacturers and Traders (SMMT) released noteworthy news regarding car registrations.
Check out the breakdown of car registrations by brand
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In August, the latest data from the Society of Motor Manufacturers and Traders (SMMT) revealed a significant growth of 24.4% in the new car market. A total of 85,657 brand-new vehicles were registered during this period. Normally, August tends to be a slower month as many buyers opt to delay their purchases until the September numberplate change. However, the market experienced an increase of 16,799 units, indicating that it is now entering its second year of expansion. Despite this positive progress, the market is still 7.5% lower compared to its pre-pandemic levels.
The rise was propelled by a significant increase in the number of large fleet registrations, which saw a surge of 58.4% to reach 51,951 units. Additionally, business registrations also experienced growth, with a 39.4% increase totaling 1,635 units. However, private demand experienced a decline of -8.1% compared to the previous year, mainly due to a scarcity of supply in the 2022 market.
The desire for electric vehicles kept increasing, making up almost 40% (37.8%) of newly purchased cars. The popularity of battery electric vehicles also saw a significant rise of 72.3%, making up 20.1% of the market, a record for August and the highest since December. Plug-in hybrid vehicles also saw a notable increase of 70.0%, accounting for 7.7% of new registrations. The volume of hybrid vehicles remained steady with a 6.8% increase, making up 10.0% of the market.
Despite the impending implementation of the Zero Emission Vehicle Mandate in less than four months, the proposed regulation remains unseen by the industry. The automotive industry is fully dedicated to achieving Net Zero, but the limited time available poses a major risk to the market's progress. In order to meet the set targets, there is a need for a significant increase in demand from both businesses and individual consumers. However, while businesses receive financial incentives to transition, there is no comparable support package available for the private consumer market.
In a recent blog post, Mike Hawes, the CEO of SMMT, stated
As the automotive sector enters its second year of expansion, progress towards recovery is evident as electric vehicles (EVs) invigorate the market. However, there is still anticipation among manufacturers as they eagerly await the complete specifications of the forthcoming Zero Emission Vehicle Mandate, which will be implemented within the next 120 days. Merely relying on discussions and consultations does not suffice for businesses, as they require definitive clarity to effectively plan for the future. At this crucial juncture, it is imperative for the government to actively align their actions with their goals, guaranteeing the provision of adequate incentives and infrastructure that will ultimately persuade drivers to transition to EVs.
On the first day of August in 2019, a total of 92,573 registrations were recorded.
