SMMT new registrations: electric vehicle sales jump despite tax hit

The latest SMMT new registrations data saw battery electric vehicle (BEV) registrations continue recent growth trends, with volumes up by 25.5% year-on-year in May, representing a 21.8% overall market share.

However, the BEV market is still falling below government’s 28% target set for 2025, with the latest outlook anticipating a 20.9% market share this year. Overall, the new car market returned to growth with a 1.6% increase to 150,070 units.

Sheena McGuinness, Co-head of Energy and Natural Resources at RSM UK, comments: “Significant discount on electric and hybrid vehicles combined with growing confidence in the EV charging network were enough to offset any negative impact of the expensive car supplement which kicked in on electric vehicles in April. 

“However, the amount of BEVs is still way below the government mandated figures for 2025. It’s currently tracking seven percentage points below the 28% target, so more needs to be done to encourage consumers to switch but adding circa £2k to the cost of EVs due to the exemption lifting may price some out of the market. 

“We also need to see more investment in the infrastructure charging network. We did see a 4% increase in public charging devices at the start of the year which is encouraging but an accelerated programme of investment is needed to drive real change. 

“The government pledged a £200m investment in EV infrastructure charging in the Autumn Budget. Whilst this is a step in the right direction if this is used to fund expensive high-speed chargers, which is what drivers want and need in order to recharge quickly, which cost around £100,000 each, it will only stretch to 2,000 units. This equates to roughly one charger for every 20,000 registered drivers in the UK.

“This is fuelling concern from industry experts that the 2025 mandate at 28% will be nearly impossible to meet without further government intervention.

She added: Additional funding for a fit for purpose charging network will help, but as 40% of homes do not have access to a driveway so are reliant on public charge points, making VAT exempt on the sale of new EV cars could be a helpful move. This could be for a finite period of time to encourage consumers to go electric while helping manufacturers clear the stockpiling of EV cars on their forecourts as a result of the manufacturing mandates.