Electric vehicles increase market share but fall short of government mandate
The latest SMMT new registrations data saw registrations of new cars decline by 2.0% in the year to July at 82,908 units from 84,575 in August 2024.
Battery electric vehicle (BEV) registrations continued recent growth trends, with volumes up by 14.9% year-on-year in August, representing a 26.5% overall market share. However, the BEV market is still falling below the government’s 28% target set for 2025.
Sheena McGuinness, Co-head of Energy and Natural Resources at RSM UK, comments: “August is always a slow month ahead of the new plates coming in September, but despite the slowdown new electric vehicle (EV) registrations continue to rise - reaching its highest market share this year.
“New incentives from the Government combined with increased availability and considerable discounting is driving sales, but the UK is still falling short of the government’s Zero Emission Vehicle (ZEV) mandate, which requires 28% of new car sales to be ZEVs in 2025.
“Although we are heading in the right direction, more needs to be done ahead of the looming ban on petrol and diesel cars as ongoing manufacturer’s discounting is not sustainable. It is recognised that government grants to bolster EV sales and much needed infrastructure are remote in light of the recent announcements that long-term borrowing costs have reached their highest level this century, adding to the pressure on the chancellor ahead of the forthcoming budget. Recognising the lack of funds for grants, new and inventive ways are required to stimulate EV uptake. Introducing a new tax incentive with a finite timeframe could encourage consumers to make the transition to EVs now. The opportunity to benefit from a discount on their tax bill could be enough to sway some consumers who are considering the move.
She added: “However, the lack of infrastructure is still a blocker for some. Introducing a super deduction for investment into improving charging infrastructure in the forthcoming Autumn Budget could stimulate further progress.
“The combination of tax incentives, visible infrastructure improvements and the impending ban could all work together to kickstart change, but we need to think differently to provide the right environment to ensure mandates are achievable.”