The UK new car market grew a modest 1.1% in June, driven yet again by robust demand from fleets while consumer take-up continued to drop off.

Fewer than one in five new BEVs go to private buyers

Some 179,263 new cars were registered last month, pushing the market past the half-year million motors mark for the first time in five years, the Society of Motor Manufacturers and Traders (SMMT) has revealed.

Growth, as with previous months, was solely driven by fleet and business demand. Fleet uptake rose by 14.2% to 105,868 units – meaning larger operators accounted for almost six in 10 (59.1%) of all new cars. Business registrations to fleets with fewer than 25 vehicles were up 22.0% to 5,770 units. Combined, it means companies adopting business cars accounted for 62.3% of the sector, up from 55.0% for the same month last year.

Private retail demand however fell for the ninth consecutive month, down 15.3%. Retail buyers accounted for fewer than four in 10 new cars registered (37.7%).

Year to date, the overall market is up 6.0% – thanks solely to a 22.3% surge from fleets for the first six months of the year. Business registrations were down 0.6% while private demand fell by a marked 12.0%.

Fleet registrations are also solely driving electric vehicle demand. Battery electric vehicle (BEV) registrations rose 7.4% in June and took their highest monthly share this year, accounting for 19.0% of all new vehicle registrations, compared to 17.9% in June 2023. Stronger demand was seen for plug-in hybrids (PHEV), where volumes rose 30.0% to reach a 9.3% market share, while hybrid electric vehicles (HEV) grew 27.2% to achieve 14.9% of the market.

BEV registrations remain reliant on the fleet sector as private consumer uptake continues to soften. Private BEV uptake has fallen 10.8% year to date, with fewer than one in five new BEVs going to private buyers. Overall, BEVs now comprise 16.6% of the new car market so far this year, slightly above the 16.1% achieved in the same period last year, with uptake behind the 22.0% mandated by government for individual carmakers.

With the UK heading to the polls today, the automotive industry has called on the next government to provide greater support to the consumer on the journey to zero-emission mobility.

Mike Hawes, SMMT chief executive, said: “The year’s midpoint sees the new car market in its best state since 2021 – but this belies the bigger challenge ahead. The private consumer market continues to shrink against a difficult economic backdrop, but with the right policies in place, the next government can re-energise the market and deliver a faster, fairer zero-emission transition. All parties are agreed on the need to cut carbon, and replacing older fossil fuel-based technologies with new electrified powertrains is the essential step to achieving that goal.”

Next government must supercharge EV infrastructure and consumer incentives

The next government needs to provide greater support to the consumer on the journey to zero-emission mobility

With the UK heading to the polls today, the SMMT has urged the next government to provide greater support to the consumer on the journey to zero-emission mobility.

It’s calling for reinstated fiscal incentives for private consumers, including halving VAT on BEVs for three years and rethinking Vehicle Excise Duty changes by amending the ‘expensive car’ supplement due to be applied from BEVs from next April.

It’s also calling for a fairer approach to public charging costs by reducing VAT from 20% to 5%, in line with home charging.

Deloitte has said too that efforts to incentivise private consumers to switch to BEVs need ramping up, especially as the market share for electric vehicles is still below the required 22% as set out in the ZEV mandate.

Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, added: “Whilst the rollout of superfast charging infrastructure is happening, there is a need for more accessible public charging. A Deloitte survey shows that consumers are more than twice as likely to be interested in switching to an electric vehicle if their home has access to off-street parking and charging facilities. The majority of people considering an electric vehicle want to charge their cars close to home, which makes charging a major barrier to purchase for consumers without access to off-street parking.”

Eco campaign group Transport & Environment also said that levelling up the UK’s charging network must be a priority, strengthening existing support for local authorities and removing barriers to charge point operators.

Ralph Palmer, UK electric vehicle and fleets officer at T&E, continued: “Meanwhile, a government-backed public information campaign on EVs and targeted measures such as social leasing schemes and diesel van scrappage schemes for small businesses needs to be on the table.”

And Novuna Vehicle Solutions has said that the fleet industry, automotive sector and the UK as a whole needs certainty on the ICE ban deadline, following the Tories’ rowback to 2035 and the wide-ranging approaches set out in manifestos from the opposing political parties.

Jon Lawes, managing director, elaborated: “Businesses need stability and confidence if they are to plan for long-term investment. With the UK heading to the polls, it’s vital the election ends this period of uncertainty on transition goals and provides cast-iron EV adoption deadlines.”