The UK new car market grew 21.0% in September on the back of surging fleet demand, but the industry continues to call for private motorist support for EVs as uptake declines.

BEV registrations were up 18.9% in their 41st consecutive month of growth

New car registrations totalled 272,610 last month, latest figures from the Society of Motor Manufacturers and Traders (SMMT) reveal – up for the 14th month running.

Fleets drove expansion during the all-important ‘new plate month’. Registrations by larger fleets rose 40.8% to 143,256 units, hitting a market share of 52.5% that’s more in line with historic levels before supply shortages restricted deliveries to operators. However, take-up by smaller business fleets – companies with fewer than 25 vehicles – fell 12% to 6,410 units. Combined fleet registrations rose to 149,666 units, up 37.3% on September 2022.

Private consumer demand also rose, but by a smaller 5.8%, growing to 122,944 units. As a result, the industry enjoyed its best September since 2020, although registrations remain 0.6% below pre-pandemic levels.

Electrified vehicle uptake continued to grow in the month. The big winner was plug-in hybrid vehicles (PHEVs), which rose 50.9% to take a 6.8% market share (5.5% for September 2022) followed by hybrid electric vehicles (HEVs), which grew 30.7% to account for 13.9% of all registrations (12.9% September 2022).

Battery electric vehicles (BEVs) saw their 41st consecutive month of growth – up 18.9% to 45,323 units. But their market share slipped back slightly to 16.6% from 16.9% a year ago – less than the 22% sales target that will be levied from 2024 under the newly announced ZEV mandate.

And notably BEV volume increases were driven entirely by fleet purchases, which rose by 50.6% year on year, supported by “compelling” tax incentives including low Benefit-in-Kind ratings and high write-down allowances. Conversely, private BEV registrations fell 14.3% with less than one in 10 private new car buyers opting for electric during the month.

Calls for ambitious policymaking on EV incentives and infrastructure

Many industry experts have said last month’s government pushback on the 2030 ICE ban was too late to affect private buyer EV sales, but the fallback has led to renewed calls to drive demand.

The SMMT said the decline underlines the importance of providing private buyers with purchase incentives and other mechanisms to stimulate demand – vital to meet the ZEV mandate requirement for zero-emission vehicles to comprise half of each manufacturer’s new registrations within five years, 80% by 2030 and 100% by 2035.

Mike Hawes, SMMT chief executive, said: “A bumper September means the new car market remains strong despite economic challenges. However, with tougher EV targets for manufacturers coming into force next year, we need to accelerate the transition, encouraging all motorists to make the switch. This means adding carrots to the stick – creating private purchase incentives aligned with business benefits, equalising on-street charging VAT with off-street domestic rates and mandating charge point rollout in line with how electric vehicle sales are now to be dictated.”

Hawes added that the upcoming Autumn Statement is “the perfect opportunity to create the conditions that will deliver the zero-emission mobility essential to our shared net zero ambition”.

Richard Peberdy, UK head of automotive for KPMG, said more EV competition and lower pricing were key to increasing EV adoption and ensuring that the BEV market share rises to meet the 22% target set for 2024 in the ZEV mandate.

He added: “Availability of charging points on residential streets remains a major barrier to transition to EVs for the many people who don’t have off-street parking. And ensuring that on-street charge point numbers increase is also key to the UK meeting the 22% ZEV target next year. The Government might also look at the disparity between VAT charged at 5% on home charging versus the 20% charged for on-street charging.”

And Novuna Vehicle Solutions also called for action on charging infrastructure as it warned of concerns over government U-turns on areas such as HS2.

Jon Lawes, managing director, commented: “The UK government has been sending mixed messages about its net zero policy and the decision to scrap HS2 will fuel concerns about its commitment to long-term infrastructure investment, a key pillar of the EV transition.

“High-speed charging access and grid capacity is a persistent challenge. The launch of the UK’s largest charging hub in Birmingham is a positive sign and shows corporates are ready to embrace the transition. However, this needs to be matched by ambitious policymaking on critical infrastructure to give businesses and consumers confidence in EV adoption.”