SMMT new registrations: Strong growth for EVs but tax headwinds could derail progress
The latest SMMT new car registration data saw registrations of new cars fall by 1.6% in the year to November to 151,154 units, but with battery electric vehicles (BEV) continuing their upward trajectory.
Plug-in hybrid electric vehicle (PHEVs) registrations increased by 14.8% year-on-year and now have an 11.9% overall market share, well above the average. Battery electric vehicle (BEV) registrations increased by 3.6%, in line with growth trends. There were 39,965 BEV units in November, accounting for 26.5% of 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: “New car registrations fell in November overall but the upward trend in new plug-in hybrid electric vehicle (PHEVs) and battery electric vehicle (BEVs) registrations continued for a third month in November with the strongest growth coming from PHEVs followed by BEVs – demonstrating steady progress towards ambitious Zero Emission Vehicle (ZEV) mandates.
“Hybrids continue to be a popular choice as they provide a good transitional option that alleviates range anxiety and meet emission regulations. Hybrid registrations have been increasing at a rate above other vehicle types, and I suspect this trend will continue in the near term but will drop off in the next quarter.
“Following the budget we might start to see a U-turn on sales as hybrid drivers will be hit twice with fuel duty increases and the new road tax on EVs and hybrids.
“Businesses may also reconsider corporate fleet options and opt for full electric vehicles instead, however the infrastructure challenges remain. Gaps in charging accessibility and no certainty on when wide-spread investment will provide a robust charging network, is a key barrier to businesses, and consumers, making the switch.
She added: “Battery electric vehicles sales are still behind the ZEV mandates, and the budget announcement could derail progress here. Increasing the expensive car threshold to £50k will offset some of the budget pain, but many will see the pay per mile taxation as another blow to the transition to electric motoring. To meet the mandates, car manufacturers may have to discount further to drum up sales, but at some point, this will become unviable.”