- UK hit one million electric vehicle registrations in January 2024, alongside an 8.2% growth in the new car market.
- Notably, the achievement was driven by a robust fleet market performance.
- Industry urges government support, proposing a temporary VAT reduction on new BEVs in the upcoming Budget.
The UK has gained over one million electric vehicle registrations, a huge milestone for the nation’s decarbonisation goals
The United Kingdom has hit an enormous milestone with a total of one million electric vehicle registrations as of January 2024. This is according to data released by the Society of Motor Manufacturers and Traders (SMMT). Concurrently, the broader new car market demonstrated an 8.2% growth for the month.
The registration of the one-millionth BEV since 2002 underscores the growing strength and popularity of the industry. BEV market share for January reached 14.7%, indicating a year-on-year increase but slightly below the 2023 performance of 16.5%. Plug-in hybrids (PHEVs) secured an 8.4% share, boasting a substantial growth of 31.1%. Meanwhile, hybrid (HEV) volumes dipped by -1.2%, representing a 13.1% share.
The BEV supply chain grappled with anticipated volatility as manufacturers adjusted product allocation post the last-minute resolution of UK-EU rules of origin. While fleet and business demand for BEVs surged by 41.7% in January, registrations by private buyers saw a notable -25.1% decline, a recurring trend that could impact the UK’s pursuit of net-zero goals.
January witnessed the registration of 142,876 new cars, marking the most robust performance for the month since 2020. The surge, driven by a formidable 29.9% increase in the fleet market, stood in contrast to a significant -15.8% decline in private retail uptake. Fleets, contributing 63.2% of new car registrations, showcased a notable uptick from the preceding year’s figure of 52.7%.
Is the milestone enough?
Despite being the only major market with a 2035 end-of-sale date for internal combustion engine vehicles, the UK currently lacks substantial consumer incentives. Additionally, the ZEV mandate dictates that 80% of new car registrations must be zero-emissions by 2030. As such, industry stakeholders urge the government to consider a temporary halving of VAT on new BEV purchases in the upcoming Budget. This move could be pivotal in supporting the growth of EV adoption, with an average cost of £1,125 per car for the Treasury.
Kim Royds, Mobility Director at Centrica, states:
“The new car market continues to defy expectations and deliver sustained growth, particularly among electric vehicles. The challenge now is to find ways to encourage all drivers to make the switch to zero emission vehicles and help deliver on the UK’s net zero ambitions.
Inequality of public charging infrastructure remains a significant hurdle to widespread EV adoption, but that’s only one piece of the puzzle. Delivering at-home and kerbside charge point solutions with affordable charging costs will go a long way to convince would-be EV drivers that an electric future can be achievable.
We need to strike a balance between home and public charging in order to create an easily accessible and cost-effective infrastructure that doesn’t exclude anybody from the transition.”
Mike Hawes, SMMT Chief Executive, commented:
“It’s taken just over 20 years to reach our million EV milestone – but with the right policies, we can double down on that success in just another two. Market growth is currently dependent on businesses and fleets. Government must therefore use the upcoming Budget to support private EV buyers, temporarily halving VAT to cut carbon, drive economic growth and help everyone make the switch. Manufacturers have been asked to supply the vehicles, we now ask government to help consumers buy the vehicles on which net zero depends.”
The 2024 market outlook projects a total of 1.974 million units, with BEVs comprising a reduced market share of 21.0%. Challenges such as elevated energy prices, inflation, interest rates, charging concerns, and inconsistent government messaging have contributed to fluctuating demand. Despite these obstacles, projections suggest that 414,000 BEVs will join the ranks in 2024, constituting over one-fifth of new cars, and potentially more if a VAT reduction on EVs materialises.