The UK new car market has recorded its 22nd consecutive month of growth this May. This surge has been largely driven by the rising sales of battery electric and hybrid vehicles. Despite achieving this milestone, overall numbers are still 20% lower than those seen in 2019.
Rising Sales in Electrified Vehicles
In May, 147,000 cars were registered, marking a 1.7% increase from the previous year, according to the Society of Motor Manufacturers and Traders (SMMT). This May was the best since 2021, though figures remain below pre-pandemic levels.
Battery Electric and Hybrid Vehicles
The shift towards new energy technologies has significantly impacted the market. Battery electric car sales rose by over 6% to 26,000, capturing 17.6% of the total market.
Plug-in Hybrid Sales Surge
Plug-in hybrid sales surged by 31%, accounting for 8% of the market, while hybrid sales increased by 10%, representing a 13% market share. However, diesel sales continue to decline, and petrol sales have seen a slight fall, though they still make up 55% of the market.
Private vs. Fleet Sales
The latest figures reveal a 2% drop in electric car sales to private motorists year-on-year. Retail buyers account for less than a fifth of zero-emission sales.
Incentives for Corporations
The majority of electric vehicle (EV) sales are to fleet buyers, including large corporations, rental car firms, and government agencies. These buyers benefit from company car tax breaks and salary sacrifice schemes not available to the general public.
Infrastructure Challenges
Jamie Hamilton from Deloitte emphasised the need for more public charging infrastructure to encourage consumer adoption of EVs. “Currently, electric vehicles don’t appear to make sense for consumers, unless they can charge their cars at home overnight,” he said.
Consumer Hesitation
Lisa Watson from Close Brothers Motor Finance noted that private buyers might delay purchasing decisions in anticipation of new incentives or cheaper electric cars. “Consumers remain hesitant to switch due to inadequate infrastructure and high costs,” she added.
Calls for Government Action
SMMT Chief Executive Mike Hawes called for reduced VAT on electric car purchases and public recharging points to support mass adoption of zero-emission vehicles.
Market Competition
Colin Walker from the Energy and Climate Intelligence Unit highlighted the competitive market. He said that legacy carmakers like BMW, Mercedes, Kia, and Hyundai are likely to meet quotas, improving choice and reducing costs.
Future Outlook
The debate continues on the best way to facilitate the transition to zero-emission vehicles. Stakeholders advocate for a balance of incentives and regulations to drive the market forward.
The consistent growth in the UK car market highlights the increasing adoption of electric and hybrid vehicles. However, significant challenges remain in terms of infrastructure and consumer incentives. Only with a balanced approach can the transition to zero-emission vehicles be successfully achieved.
