January 2024, the UK automotive sector marked a significant milestone with the registration of the country's millionth battery electric vehicle (BEV), highlighting a growing trend towards greener transportation. This achievement coincided with an 8.2% increase in new car registrations, totalling 142,876 units, marking the strongest start to a year since 2020 and continuing an 18-month streak of growth. However, this rise was predominantly seen in the fleet market, which surged by 29.9%, in contrast to a 15.8% decline in private retail sales.
BEVs accounted for 20,935 of the new registrations in January, up 21% from the previous year, bringing the total BEV registrations to 1,001,677 since records began. Despite this growth, the BEV market share of 14.7% for January was slightly lower than the overall performance in 2023. The industry also saw an increase in plug-in hybrid (PHEV) registrations by 31.1%, while hybrid vehicle (HEV) registrations experienced a minor decrease.
The fluctuation in BEV supply, influenced by adjustments in product allocation following UK-EU trade negotiations, continues to present challenges, particularly impacting affordability and accessibility for private buyers. The Society of Motor Manufacturers and Traders (SMMT) has highlighted a concerning trend of declining registrations by private buyers, which could hinder the UK's efforts to achieve its net zero targets.
Amidst this backdrop, the automotive industry continues to advocate for government intervention to support the transition to electric vehicles. Ahead of the upcoming Budget, there is a call for temporary VAT reductions on new BEV purchases, a move that could significantly boost electric vehicle adoption by making them more financially accessible to private buyers. Such a measure would not only help to cut CO2 emissions but also contribute to economic growth and support the UK's net zero ambitions.
Mike Hawes, SMMT Chief Executive, emphasised the need for government support to accelerate the adoption of electric vehicles among private buyers, suggesting that with the right policies, the next million EVs could be achieved in half the time it took to reach the first million. Despite the challenges of high energy prices, inflation, and other factors limiting demand, the industry remains a crucial part of the UK economy, contributing significantly to R&D, employment, and exports.
As the UK automotive sector continues to navigate the transition towards electric vehicles, the push for policy measures to facilitate this shift becomes increasingly critical. With over 25 manufacturing brands and a comprehensive supply chain, the industry's success in this endeavour will have far-reaching impacts on the country's economic health and environmental goals.
The post-Covid recovering in car sales is good for many sectors of the UK's commercial landscape.
