In March, the UK's light commercial vehicle (LCV) market experienced a decline, with registrations down by 3.2% compared to the same month last year. This marks the fourth consecutive monthly decrease, a trend influenced by ongoing economic uncertainty which has tempered business investment in new vehicles. The only good news was an increase in the sale of electric commercial vehicles. Market conditions means that the Government has felt it necessary to offer further encouragement to local EV production – especially in the face of the on-going tariff wars.
Overall, the UK is taking a leadership position in EVs. The UK was the largest EV market in Europe in 2024 and the third in the world with over 382,000 EVs sold – up a fifth on the previous year. There are now more than 75,000 public chargepoints in the UK – with a new one added every 29 minutes – ensuring that motorists are always a short drive from a socket. But that has not been reflected in the commercial vehicle market.
The decline in overall commercial vehicles sales was most pronounced in the largest van segment, which saw a 10% drop in registrations, totalling 32,025 units and representing 62.5% of the total market. Medium-sized vans and 4x4s also experienced declines of 8.5% and 18.9%, respectively. However, there was a notable increase in the registration of small vans, which grew by almost 61% to 1,585 units, now making up 3.1% of the market.
Amidst these broader market challenges, electric vehicles (EVs) in the LCV category are seeing significant growth. In March, battery electric vans up to 4.25 tonnes recorded a 40.3% increase in registrations, reaching a new monthly high of 4,215 units. This growth in electric uptake, now accounting for 8.3% of the market share in the first quarter of the year, is supported by the Plug-in Van Grant which remains a critical incentive for operators. Despite these positive developments, electric LCVs still only represent half of the 16% market share targeted for 2025, underscoring the need for further measures to boost the adoption of greener vehicles.
Mike Hawes, SMMT Chief Executive, said, “[The news] is positive that electric uptake continues to rise thanks to growing model choice. Even so, with demand still well below 2025 ambitions, suitably bold plans for infrastructure rollout and workable regulation are needed to grow operator confidence and the investment that is needed.”
Changes to the Zero Emission Vehicle Mandate
The UK Government has announced significant changes to the Zero Emission Vehicle (ZEV) Mandate, aimed at facilitating the industry's transition to electric vehicles amid global economic challenges. The mandate confirms the phase-out of new petrol and diesel car sales by 2030, with hybrids allowed until 2035, and small manufacturers exempt from these requirements. This policy adjustment is intended to give firms greater flexibility in how they meet their targets, easing some of the immediate pressures on the industry.
In support of these changes, the government has committed £2.3 billion to enhance the manufacturing of zero-emission vehicles and to assist consumers in making the transition to electric models. This investment is part of a broader ‘Plan for Change,' which seeks to accelerate economic restructuring in response to new global insecurities.
The revised mandate includes increased flexibility for car manufacturers leading up to 2030, allowing them to sell more vehicles in later years when demand is expected to be higher. Additionally, the ability to count hybrids towards fleet averages will continue until 2035, providing a more gradual transition pathway. The government will also maintain incentives such as tax breaks to encourage the adoption of electric vehicles.
Moreover, new infrastructure investments are planned, with a public charge point being added every half hour, significantly enhancing the UK's charging network. This initiative is part of a wider strategy to position the UK as a leader in electric vehicle technology and adoption, supporting the automotive industry's long-term growth and sustainability. Investment from the previous Government, two years ago, is still having a positive impact in this area.
These measures reflect the government's commitment to strengthening the automotive sector and ensuring it can navigate and capitalise on the transition to a zero-emissions future, all while supporting economic growth and technological innovation in the UK. Still, there are many who wish the Government would re-instate supportive purchase grants.
Discussion about this post