The automotive industry has seen consistent growth despite the cost-of-living crisis affecting multiple industries.
In the first quarter of 2023, a total of 494,260 cars were registered in the UK. 2024 saw an increase in registrations of 51,288 for a total of 545,548 registrations.
For both quarters, petrol vehicles were the most popular new cars registered for a combined total of 517,487 vehicles.
Over this period, electric vehicles were the second most popular vehicles registered. There was a combined total of 160,544 EVs registered.
EVs have seen an increase of 8,084 registrations between quarter one of 2023 and 2024.
Professor David Bailey, a professor of Business Economics at the Birmingham Business School said: “We’re still seeing the market for EVs growing, but at a slower rate, and now it’s being driven really by fleet sales because of the tax breaks.
“Even though battery electric vehicles (BEVs) sales are increasing, they’re increasing slowly. So, the market share is declining and that’s not where we want to be, given the need to transfer to net zero.”
As it stands currently according to the Society of Motor Manufacturers and Traders (SMMT) the UK is currently the only major market to combine a 2035 end-of-sale date (for new petrol and diesel vehicles) with a mandated zero-emission vehicle market share without any significant incentives for consumers.
Professor Bailey said: “The government eliminated subsidies for people buying [new] EVs this time last year.
“In fact, that was too early because electric vehicles are still more expensive than petrol and diesel cars.”
In a press release, Richard Peberdy, UK head of automotive for KPMG said: “Sales growth of new EVs to consumers has plateaued.
“Increasing EV sales is now all the more important after the Zero Emission Vehicle Mandate began this year.”
The Zero Emission Vehicle Mandate was introduced to set out the percentage of new zero-emission cars and vehicles manufacturers must make every year up to 2030. By 2030, 80 percent of new cars sold in Great Britain will be net zero, and 70 percent of new vans will be net zero.
As it stands, electric vans qualify for the plug-in van grant which ranges between £2,500 and £5,000 available for qualifying vans.
However, for those who are looking to purchase an electric car, there are no grants currently available to aid towards the purchase. Instead, there is the electric vehicle chargepoint grant. The grant will provide those who are eligible with £350 or 75 percent off the cost to install an electric vehicle charge point at your property, whichever amount is lower.
Not only the types of vehicles have changed, but the way people are purchasing vehicles has changed.
Growth across both quarters has been driven purely by fleet sales. Private sales have seen a decline.
In the first quarter of 2023, a total of 228,253 vehicles were registered as private vehicles. For the same period in 2024, this dropped to 207,246 vehicles.
Mr Peberdy said: “Ongoing pressure on household budgets and a higher cost of car finance mean that it’s still a difficult economic period for many wanting to buy a new car.
“Overall, the UK market continues to hold up relatively well to this challenge, boosted by the flowing of new vehicles, discounting on many forecourts, and expert demand.”
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