UK new car registrations fell 1.3% in August, marking their first decline in 24 months, although EV demand soared.

Battery electric car demand was up 10.8% in August as buyers responded to a summer of heavy discounting

Ahead of September’s plate change, a total of 84,575 new cars were registered last month, some 1,082 fewer than in the same month last year, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

Bucking recent trends, sales to private buyers were up slightly by 0.2% while registrations to larger fleets were down by 1.2% and ‘Business’ registrations to fleets with fewer than 25 vehicles fell 30.3%. Despite this, purchases by small and large fleets drove the market, accounting for six in 10 cars (62.0%) registered last month, or 52,465 units.

Petrol and diesel uptake fell by 10.1% and 7.3% respectively, but still accounted for more than half (56.8%) of all new car uptake in August.

Plug-in hybrid (PHEV) registrations declined 12.3%, with a 6.8% share, but hybrid electric vehicle (HEV) uptake increased, by 36.1%, to take 13.8% of the market.

Battery electric vehicles (BEVs) were the star of the show; registrations were up 10.8% thanks to heavy discounting by manufacturers over the summer to meet their ZEV mandate targets for the year, plus a raft of new models attracting buyers. BEV market share in August reached 22.6%, the highest for a month since December 2022 when BEVs commanded 32.9% of all new cars reaching the road, and was in line with the ZEV mandate target of 22% for carmakers.

Year-to-date figures show that the fleet sector continues to command the new car market. Larger fleet registrations are up 19.2% for the first eight months of the year, although demand from smaller fleets fell 3.3%. Together, the fleet sector has accounted for 62.2% of the new car market over the course of 2024 so far – up from 55.3% for the same period in 2023 and dwarfing the 37.8% share taken by consumers.

The YtD figures also show that BEV market share has edged up to 17.2% and is expected to rise further to 18.5% by the end of the year thanks to increasing model choice – with some 364,000 BEVs registrations forecast for the year. Despite this growth, this will still be shy of the 22% required for carmakers under the ZEV mandate. Labour’s plans to reinstate the 2030 ICE ban for new cars also loom large, with a consultation expected to open later this month.

With the Autumn Budget also due on 30 October, the car industry is calling for urgent action to bolster the market for new EVs, including binding targets on public charge point provision commensurate with those placed on industry, the reintroduction of incentives for private buyers and removal of disincentives, including the Vehicle Excise Duty expensive car supplement that’s set to be introduced in 2025.

Mike Hawes, SMMT chief executive, said: “August’s EV growth is welcome, but it’s always a very low-volume month and so subject to distortions ahead of September’s number plate change. The introduction of the new 74 plate, together with a raft of compelling offers and discounts from manufacturers, plus growing model choice, will help increase purchase consideration and be a true barometer for market demand.

“Encouraging a mass market shift to EVs remains a challenge, however, and urgent action must be taken to help buyers overcome affordability issues and concerns about charge point provision.”

Industry reaction

The new figures have fuelled existing concerns about the new government’s 2030 ICE ban plans along with the ZEV mandate impact on the market.

Jon Lawes, managing director at Novuna Vehicle Solutions, said: “Despite buoyant EV sales in August driven by fleets, the industry quickly needs confirmation from policymakers around ICE phase-out plans to avoid a slowdown in momentum.

“With the 2030 deadline back on the table, we need clarity on important details around classifying hybrid vehicles and the outlook for vans which the imminent consultation, coming late down the track, must address.

“As the supply of ICE vehicles dissipates, the sector requires a clear strategy to ensure both new and used EV take up beyond fleets becomes more compelling for drivers.”

And Cox Automotive reiterated its concerns over carmakers’ rush to meet ZEV mandate targets.

Philip Nothard, insight director, Cox Automotive, stated: “The ZEV mandate may be grounded in good intention, but it is putting the new vehicle sector under impossible and unreasonable pressure. The tactics we are likely to see deployed by OEMs and retailers to hit their numbers in the closing months of this year will be drastic, expensive and risky, creating an unrealistic and unnatural market with potentially far-reaching consequences over the long term. We urge the Government to listen to the sector’s feedback, review the mandate and implement support packages to fast-track EV adoption.”

Many in the automotive and fleet sector also echoed the SMMT’s call for enhanced EV support.

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), said: “Consumers, continue to face numerous challenges, with cost remaining the most significant barrier to electric vehicle adoption. According to NFDA’s 2024 Consumer Attitude Survey, 55% of respondents believe EVs are still too expensive. It is crucial that the Labour government addresses these concerns, emphasising the need for price incentives for private consumers to complement this supply-side shift.”

Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, said: “Concerns around charging is still a major barrier to purchase for consumers without access to off-street parking, so efforts to roll out superfast charging infrastructure will be crucial in the growth of this developing market.”

Kim Royds, mobility director at Centrica, backed this up: “A big part of making the UK’s roads electric is tackling the inequality that exists between at-home and public EV charging. So many homeowners don’t have access to a driveway and so can’t have easy-to-use private charging to make their electric dream a reality.

“A collaborative approach between policymakers and industry leaders is urgently needed now to ensure the clearly-growing appetite for going electric can be met.”