Registrations of new electric cars soared in July but concerns for private buyer demand remain paramount.

Electrified vehicles accounted for four in 10 registrations in July

Newly published figures from the Society of Motor Manufacturers and Traders (SMMT) show that the overall new car market rose 2.5% last month with 147,517 new cars reaching the road. The market, which recorded its 24th consecutive month of growth, was once again supported by surging fleet demand, which helping to counteract the continued slump in private buyer demand.

Electrified vehicle demand continued to rise in July – accounting for four in 10 (41.9%) registrations.

Hybrid electric vehicle (HEV) uptake increased by 31.4% to achieve a 14.5% market share, while plug-in hybrids (PHEV) grew 12.4% to take 8.9% of registrations.

Registrations of battery electric vehicles (BEVs) were up 18.8%, outpacing the overall market. The surge pushed BEV market share to 18.5% – up from 16.0% a year ago but still under the 22% required for carmakers to hit their ZEV mandate targets for this year.

While the private share of the BEV market continues to fall – 17.2% went private buyers, compared with 20.3% last year – private BEV volumes did increase by a marginal 0.9%. Overall, BEVs accounted for 16.8% of the new car market, year to date.

With zero-emission vehicles mandated to comprise a minimum 22% of each brand’s new car registrations over the full year, the SMMT has warned that the pace of transition needs to increase significantly.

Its latest industry outlook, however, suggests that such a surge is looking increasingly unlikely given the current market conditions. While the outlook anticipates overall market growth in 2024, expectations have been revised downwards since April, with 1.968 million new car registrations now forecast by the end of the year.

The anticipated BEV share of the market has also been revised downwards to 18.5% from the 19.8% expected in April.

The SMMT said weakening private retail demand for EVs – despite significant manufacturer discounts – was an over-riding concern.

Mike Hawes, SMMT chief executive, commented: “More people than ever are buying and driving EVs but we still need the pace of change to quicken, else the UK’s climate change ambitions are threatened and manufacturers’ ability to hit regulated EV targets are at risk. Achieving market transition at the pace demanded requires greater support for consumers and, with the all-important new numberplate month of September beckoning, action on incentives and infrastructure is needed now.”

Clarity needed on 2030 ICE ban

The continued fallback in private demand shows the urgent need to restimulate the private electric market

Many in the fleet and automotive sector have responded to the figures by calling for EV incentives for private buyers and clarity on the 2030 ICE ban following Labour’s election win.

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), said the continued fallback in private demand showed the urgent need to restimulate the private electric market.

“It is encouraging to witness another month of continuous growth in the electric vehicle market. However, the overall market share of electric vehicles, now at 16.8%, still falls short of the 22% required by the ZEV mandate. This is an important consideration for the new government, particularly as they aim to reinstate the 2030 phase-out date of ICE vehicles.

“With two years of continuous growth, NFDA urges the new government to remain vigilant on key issues affecting the sector to ensure this momentum continues.”

Richard Peberdy, UK head of automotive for KPMG, added: “Benefit-in-Kind and salary sacrifice incentives for business have been the major driver of growth in EV sales and market share for some time now.  The evidence increasingly suggests that accelerating private EV sales may require similar incentivisation, particularly if the Government is going to reinstate the 2030 end to new petrol and diesel vehicle sales.

“While choices in the new car market are improving, EV prices and the scale and rate of price depreciation when buying from new remain major barriers to convincing consumers to buy a new EV. Subsequently, many consumers that are looking to transition to an EV are deciding that the used EV market is a more attractive way to do that.

“Despite used EV sales growing, the higher rate of stock that is currently coming into the used market is still pushing the price of some models down even further.

“All of this context continues to pose big questions regarding how carmakers will meet their ZEV mandate targets.”

British Gas owner Centrica has also called for action on EV incentives for private buyers.

Kim Royds, mobility director at Centrica, said: “EV production levels continue to fly high – but driver demand outside of fleets remains low heading into summer and the summer holiday period. It’s clear more work needs to be done to remove barriers to adoption and give drivers the confidence to make the switch.

“Without a doubt, tackling the inequality that exists between at home and public charging should remain a top priority. A large proportion of homeowners live without access to a driveway and therefore are restricted from unlocking the main benefits of going electric. Creating at home and kerbside charge point solutions with affordable charging costs must be high on the list for industry leaders and policymakers to ensure that nobody is left behind.”

The UK leasing sector has also warned about the need for action and support.

Jon Lawes, managing director at Novuna Vehicle Solutions, said: “Despite uptake of EVs accelerating last month, market share continues to fall among private buyers and remains behind the mandated target set.

“Speculation on whether the Government will restore the UK’s 2030 ICE phase-out deadline just leads to more uncertainty and potential damaging delays in investment.

“We need to stop kicking the can down the road and put 2030 firmly back on the table so policymakers can get on with implementing the changes needed to maintain momentum towards EV adoption at scale, support OEMs with meeting the ZEV mandate and give confidence to businesses and consumers.”

And Nick Williams, transport managing director at Lloyds Banking Group, commented: “The new electric vehicle market is continuing to show positive growth and momentum as businesses and consumers look to reduce their carbon footprint.

“However, it is worth noting that this is likely being predominately driven through the leasing market. We therefore need policy certainty and investment from government to give much needed confidence to consumers to make the move to electric and enjoy the lower running costs both new and used cars offer. As an industry there remains real opportunity to see further growth if all parts work together and help realise the benefits offered by electric vehicles with more affordable new and used models becoming available.”

Finally, Toby Poston, BVRLA director of corporate affairs, said: “Fleet registrations, led by the huge popularity of salary sacrifice car schemes, continue to drive the uptake of EVs. This sends a clear message to the new Government. It needs to maintain access to these employee benefits and prolong current Benefit-in-Kind tax incentives in the upcoming October 30th Budget if it wants to have any chance of meeting its ZEV mandate and phase-out targets.

“Policymakers need to take this playbook and apply it to the electric van and private EV markets, where a lack of adequate incentives and shortage of cost-competitive product continues to stifle demand.”

Peugeot boosts EV market share

Peugeot’s EV growth has been boosted by the recent arrival of the E-3008

Peugeot has posted latest figures for its electric vehicles, showing a rise in its market share.

The brand’s market share of the combined electric car and van market has increased to 4.14% year-to-date.

July proved a successful month for Peugeot, with its share of the electric car and van market growing to 5.47%, an increase of 4.26 percentage points compared to the same month last year, and contributing to electric vehicles making up 28.57% of sales in the month, putting it well ahead of ZEV mandate targets.

Growth was driven in part by the recent arrival of the new E-3008, which was among the top 10 best-selling electric cars in July following its first full month of customer deliveries.

Peugeot sold 8,483 electric vehicles in the first seven months of 2024 compared to 6,326 at the same point in 2023. By the end of this year, the carmaker will offer 12 all-electric vehicles, including nine passenger cars and three electric light commercial vehicles.

Overall, Peugeot reported registrations of 39,271 cars for the year to date, compared to 33,928 sold by this time in 2023.

Eurig Druce, managing director at Peugeot UK, said: “Our positive sales performance, as we head towards full compliance with the UK’s 2024 ZEV mandate, is testament to our leadership and innovation in the electric vehicle market, achieving an electric mix of over 28% electric in July whilst also growing our overall market share. It is also encouraging to see the success of the E-3008 in its first full month of trading. These figures support Peugeot’s commitment to EVs with market-leading range figures up to 422 miles and we are proud to offer our customers the most comprehensive, all-electric line-up of any mainstream European brand.”