The new car market shot up 23.5% in November on the back of rocketing fleet and electric vehicle registrations.

November’s 23.5% in new car registrations was on the back of rocketing fleet and EV demand

A total of 142,889 units were registered last month, up for the fourth month running and signalling the best November total since 2019, according to the Society of Motor Manufacturers and Traders (SMMT).

The market was energised by pent-up demand from larger fleets; up 45.4% compared with November last year as carmakers worked to fulfil orders amid ongoing components shortages. Earlier this year, the BVRLA had warned that carmakers were channelling sales to retail customers to “prioritise profit margins”. November showed work to tackle this, with fleet registrations rising to 74,184 units from 51,005 for the same month in 2021.

The difference compared to last year was even more pronounced for ‘Business’ registrations to fleets with fewer than 25 vehicles. These were up 112.2%, from 2,080 units to 4,413, although they remain a small fraction of the overall market. Demand from private buyers also grew, but by a more modest 2.7%.

Zero-emission vehicle uptake continued to climb, hand in hand with soaring fleet demand. Battery electric vehicles (BEVs) were up 35.2% and accounted for more than one in five new cars (20.6%) – the largest monthly share of BEVs this year.

But plug-in hybrid (PHEVs) registrations fell by 5.7%, making up 7.1% of the market. Combining both BEV and PHEV registrations, some 39,558 new plug-ins were registered, representing more than one in four (27.7%) new cars joining UK roads in November.

Hybrid electric vehicles (HEVs) also rose, up by 66.9% to 11.2% of the market, driven particularly by fleet operators looking for flexibility and emissions reductions.

Despite the positive figures, the SMMT has still warned that registrations in the month were 8.8% below 2019 levels. And while further recovery is anticipated in 2023, with an anticipated 15.4% market growth, the industry body added that global and domestic economic challenges mean that the market will remain below pre-pandemic levels.

It’s also renewed its call for urgent government action to deliver charging infrastructure expansion and support EV uptake, particularly as the Zero Emission Vehicle Mandate comes into effect.

Mike Hawes, chief executive, said: “Recovery for Britain’s new car market is back within our grasp, energised by electrified vehicles and the sector’s resilience in the face of supply and economic challenges. As the sector looks to ensure that growth is sustainable for the long term, urgent measures are required – not least a fair approach to driving EV adoption that recognises these vehicles remain more expensive, and measures to compel investment in a charging network that is built ahead of need. By doing so we can encourage consumer appetite across the country and accelerate the UK’s journey to net zero.”

Not yet out of the woods

The latest figures were welcomed across the new car and leasing sectors, but with some trepidation on the picture for 2023.

Jon Lawes, managing director, Novuna Vehicle Solutions, said: “Supply chain issues are now one of the most significant barriers to EV adoption. We’re seeing fewer than half the number of cars rolling off production lines than we did five years ago, owing primarily to ongoing issues obtaining computer chips for vehicles, which could severely dampen EV adoption in the coming months.

“While companies such as ours have taken steps to meet demand, such as purchasing vehicles up to 15 months in advance to ensure customers can get into new vehicles as soon as possible and extending lease agreements for those willing to wait, it’s clear that this isn’t the solution. To reduce these vulnerabilities and provide confidence to the sector, the Government should consider developing a robust semiconductor industry in the UK.”

Meanwhile, Deloitte said the industry was increasingly looking to fleet sales as consumer demand – the focus for many carmakers in recent months – starts to wane.

Jamie Hamilton, automotive partner and head of electric vehicles, said: “As the rising cost of living continues to squeeze consumer pockets, the short-term prospects for the automotive sector rely heavily on the performance of fleet sales.

“With many fleet managers currently under pressure to manage a wholesale transition to electric, there will have been relief that the Autumn Statement signalled a continued commitment to encouraging EV adoption through company car schemes.

“Signposting the road ahead for BiK rates should give fleet managers renewed confidence to forge ahead with the transition to electric. However, with supply still struggling to keep up with demand, it might be a while before we see this translate into a significant increase in sales.”

And British Gas echoed the SMMT’s comments for further action on the charging infrastructure.

Kim Royds, EV director, said: “Despite ongoing supply chain challenges, the accelerated growth of electric vehicles continues to dominate the new car market – reaffirming the appetite among drivers to transition away from traditional petrol or diesel vehicles.

“However, there is still a great deal of work to be done to futureproof the UK’s charging network to meet the increased demand and ensure all motorists have access to reliable and convenient charge points. Providing compelling and easy options for home charging is a vital part of this and will help to stimulate further growth across the EV market.”