The UK new car market posted its seventh straight month of growth in February, supported by rising demand for electric cars.

Nearly half a million PHEVs and BEVs are expected to join UK roads in 2023

While February is typically low volume ahead of the March plate change, total registrations this year rose 26.2% to 74,441 units on the back of strong demand following the supply chain shortages.

The rise steered the market closer to pre-pandemic levels and the total figure was down just 6.5% on the same month in 2020, according to the figures from the Society of Motor Manufacturers and Traders (SMMT).

Take-up was particularly strong by larger fleets, which rose 46.2%, while deliveries to private buyers were up 5.8%. ‘Business’ registrations to companies with fewer than 25 vehicles, which account for a fraction of the market, increased by 0.7%, equivalent to just nine units.

Demand for zero and ultra-low emission cars continued to rise. Deliveries of battery electric vehicles (BEVs) rose 18.2% and accounted for one in six (16.5%) new UK car registrations. Plug-in hybrids (PHEVs) were up 1.0% and took a 6.3% share of the market. Combined, plug-ins accounted for almost a quarter (22.8%) of all deliveries in the month, with further growth expected.

But it was hybrid electric vehicles (HEVs) that recorded the most significant growth of all fuel types, up 40.0% and holding a 12.9% market share.

The second biggest rise of the month was seen in petrol registrations (including mild hybrids) – up 35.8% with a 56.9% market share, while diesel registrations fell by 7.0%.

Ahead of the Spring Budget next week, the SMMT has called for further action to support plug-in uptake. Its figures show nearly half a million (488,000) PHEVs and BEVs are expected to join Britain’s roads in 2023, following the arrival of over 40 new plug-in electric models.

Such vehicles will inevitably increase demand for charging infrastructure, and while the industry body has greeted the new £56m LEVI capability funding announced last month, it says there is still a “clear requirement for binding targets that ensure charge point rollout keeps pace”.

It’s also called for a long-term plan for charge point investment, action to align VAT on public charging with domestic energy use, and a review of the Vehicle Excise Duty premium announced in the Autumn Statement, which the SMMT says will unfairly penalise EV buyers switching to EVs in the future.

Mike Hawes, chief executive, said: “After seven months of growth, it is no surprise that the UK automotive sector is facing the future with growing confidence. It is vital, however, that government takes every opportunity to back the market, which plays a significant role in Britain’s economy and net zero ambition. As we move into ‘new plate month’ in March, with more of the latest high-tech cars available, the upcoming Budget must deliver measures that drive this transition, increasing affordability and ease of charging for all.”

Action to help reluctant drivers make the switch

The SMMT’s call for charge point action and incentives to help EV drivers has been echoed by many industry commentators ahead of the Spring Budget.

Jon Lawes, managing director, Novuna Vehicle Solutions, said: “While electric vehicle registrations continue to rise at a steady rate, the UK risks falling behind other leading European countries in the transition to EVs and green transportation.

“Failure to intervene to adequately support the industry, notably to build a more robust supply of battery technology has stymied the UK’s progress to date.

“With the Budget fast approaching, it is clear that the Government needs to significantly pledge to ramp up investment in the UK automotive supply chain to meet industry demand or risk compromising its 2030 targets.”

British Gas EV director Kim Royds also said that increased demand for EVs was highlighting gaps in the capacity of the charging network.

“In order to continue with effective electrification, the UK must address the charging challenges households are facing that are preventing them from making the switch to electric,” she continued.

“All eyes will be on the Chancellor’s Spring Budget this month, where continued investment to expand the UK’s charging network must remain on the table if we’re to truly champion the adoption of EVs.”

And Lloyds Banking Group also said the charging infrastructure needs significant expansion, both in terms of the volume and the distribution of charge points across the country

Nick Williams, transport managing director, continued: “With the new Chancellor due to deliver his Spring Statement this month, drivers will be looking to the Treasury to confirm investment that will support the UK’s charging network.

“Similarly, individuals and businesses will be hoping to see continued incentives for choosing a zero-emission vehicle over a higher carbon alternative, with policies put in place that take a fair, emissions-based approach.

“By supporting the UK’s infrastructure, industry and drivers, the Chancellor can help maintain the momentum the country is rapidly building on its electrification journey.”

Finally, Deloitte has highlighted some interesting areas where action is needed. Jamie Hamilton, automotive partner and head of electric vehicles, said the second-hand market had some way to go to reach maturity and make EVs more affordable for consumers.

He also called for a more targeted approach to charging, homing in on changing charging preferences to capitalise on drivers’ needs.

“One in five (21%) electric vehicle drivers look for retail and hospitality amenities when charging their vehicle away from home. With a third (36%) of EV drivers prepared to wait between 21 and 40 minutes to charge from empty to 80% battery capacity, and one in four (25%) prepared to wait between 41 minutes and an hour, there is a new market opportunity for retailers and hospitality venues to cater to consumers during this charge window.

“As charging infrastructure continues its rollout, the focus is now turning to consumer expectations and how the charging process, particularly away from home, can be made easier. For example, simplifying payments with a single account rather than one per charging point type.”

Deloitte also pointed to the ZEV mandate, due to be announced shortly, which would help drive the EV market.

“From both sides – consumer and manufacturer – the EV market is growing, and growing at pace.”