The UK market outlook for battery electric vehicles (BEV) demand in 2024 has been downgraded on the back of flagging demand from private buyers, prompting renewed calls for government-led incentives.

Fewer than one in six new BEVs bought in April went to consumers

While the UK new market as a whole saw strong growth in April and rising demand for BEVs, the uplift was entirely driven by the fleet market.

A total of 134,274 new cars were registered last month; marking a modest 1.0% year-on-year uplift following the March plate change, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).

The growth heralded the market’s best April since 2021, although uptake was still 16.6% below the pre-pandemic level in what is traditionally a low volume month after the plate change.

Demand from larger fleets continued to entirely drive the growth – in line with the trend seen throughout the year so far. Fleet registrations rose by 18.5% to reach 81,207 units – accounting for more than six in 10 (60.5%) of all new cars registered in April. Private buyer uptake fell by 17.7% to 50,458 units, while ‘business’ registrations to fleets with fewer than 25 vehicles declined by 16.1%, to 2,609.

Electric vehicles were also a key driver of growth. Plug-in hybrids (PHEVs) saw the largest percentage rise, soaring by 22.1% to account for 7.8% of the market, followed by hybrid electric vehicles (HEVs), up 16.7% with a 13.1% share of demand.

Demand for BEVs was also up significantly, rising 10.7% and pushing up market share to 16.9%, a significant uplift on last April’s 15.4% and getting closer to the carmakers’ individual targets of 22% under the ZEV mandate.

Concerns are mounting for the market though – in particular for private buyer demand and most prominently for BEVs.

Fewer than one in six new BEVs bought in April went to consumers, whose uptake volumes fell by 21.9%. Meanwhile, April’s year-to-date BEV share of 15.7% is just a 0.3% increase on the same period last year.

And while 1.984 million new cars are now anticipated to be registered in 2024 – a 4.2% rise on last year, and a 0.5% increase on January’s outlook – BEV volumes for this year have been revised downwards by 5.2%, with anticipated market share now at 19.8%. That’s significantly below the ZEV mandate target of 22% per manufacturer.

While drivers today have the widest-ever choice of BEV models – more than 100 – backed by compelling offers direct from OEMs, many industry experts say that the lack of government incentives for private motorists remains an insurmountable barrier and continue to call for supportive measures. These include temporarily halving VAT on new BEV purchases and altering the threshold for the ‘expensive car’ supplement to Vehicle Excise Duty – due to apply to EVs from April 2025.

Mike Hawes, SMMT chief executive, said: “Although attractive deals on EVs are in place, manufacturers cannot fund the mass market transition single-handedly. Temporarily cutting VAT, treating EVs as fiscally mainstream not luxury vehicles, and taking steps to instil consumer confidence in the charge point network will drive the market growth on which Britain’s net zero ambition depends.”

Chris Leslie, commercial director at MAF Finance Group, said: “While it can make sense for businesses to turn to BEVs, there are simply not the same level of incentives out there to convince the consumer to take the plunge, despite a growing array of vehicles.

“So, it is of no real surprise that forecasts for volumes in 2024 have now been revised downwards. If we are going to see sustainable growth in this trend amongst private buyers, we must see decisive action.

“Beyond making sure the right charging infrastructure is built across the country, we must consider some financial measures, including a reduction in VAT on new electric cars and a revamp of the Vehicle Excise Duty.

“These measures could also play a big part in enticing consumers to make more eco-friendly choices. If the government is more pro-active in this respect, then the overall positive trajectory for sector should be maintained”.

Nick Williams, managing director at Lex Autolease, also commented: “There is a requirement for everyone involved in the electric vehicle transition to help sustain consumer confidence. From affordability to charging, we know that people have concerns, so it’s no surprise to hear some question the industry’s ability to meet its zero emission vehicle targets.

“What’s needed now is certainty from government, especially about the essential incentives needed to encourage drivers to make the switch. Prioritising the rapid and fair rollout of charging infrastructure is vital too, as well as a clear communication strategy to provide authoritative, clear and trustworthy information on EVs.

“We recognise that the transition to a more sustainable future of transport to benefit us all is not easy.”

And Philip Nothard, insight director at Cox Automotive, stated: “If manufacturers are to remain committed to the UK long term, the Government must stimulate demand. OEMs are clearly invested in the shift to electrification, but the zero emission vehicle mandate doesn’t address the more pressing issue of public confidence in EVs.”