Carmakers are sounding the alarm about slowing demand for electric cars among private buyers in the UK, leading to urgent calls for government intervention to reignite interest in battery-powered cars.
Although overall UK vehicle registrations increased by 1% year-on-year to 134,000 in April, driven by fleet sales, sales to private buyers saw a significant decline of almost 18% compared to the previous year.
Of particular concern to manufacturers is the slow growth in the market share of battery electric vehicles, which saw a marginal increase of only 0.3% in the first four months of 2024 compared to the same period in 2023, reaching 15.7%. This falls short of government targets of 22% of all new car sales being battery electric vehicles, prompting industry leaders to urge rapid action to revitalize consumer interest.
The Society of Motor Manufacturers and Traders (SMMT) has called for a package of stimulus to stimulate demand, including tax cuts, purchasing incentives and expanding charging infrastructure. Notably, the SMMT proposes to halve the value-added tax on new battery-powered cars and revise the taxation threshold for luxury cars to make electric vehicles financially more affordable for everyone.
Highlighting the importance of enhancing consumer confidence in the electric vehicle market, SMMT underscores the need for significant investments in expanding the network of charging points nationwide. Despite record installations last year, the UK still lags behind with just one standard charger for every 35 plug-in cars.
Mike Hawes, CEO of SMMT, stresses the need for government support, saying: “Manufacturers cannot finance the transition to mass market alone. Temporarily reducing VAT, treating electric vehicles as mainstream, and expanding the network of charging points They are crucial steps to drive market growth.
The government's mandate that 22% of automakers' sales in 2024 be zero-emission vehicles has been met with skepticism amid faltering uptake of electric vehicles. The recent extension of the ban on the sale of new fossil fuel cars until 2035 and the halting of plans to give electric cars to private buyers in 2022 have exacerbated industry concerns.
Car dealers echoed SMMT's concerns. Ian Plummer, commercial director at Auto Trader, said electric cars were typically 35% more expensive than conventionally fueled petrol and diesel models, adding: “The discounts we have seen manufacturers offering to incentivize consumers to buy new electric cars appear to be working… However, we will need to see more price action to achieve widespread electricity adoption.
Lisa Watson, sales director at Close Bros Motor Finance, said: “Manufacturers may have cause for concern that the number of new petrol vehicle registrations continues to outpace sales of battery electric vehicle registrations, highlighting the work needed by the UK Government. to achieve that”. It needs to be done to improve inadequate infrastructure such as charging points, and allay motorists' fears to encourage adoption.
