BEV forecast cut as UK registrations rise in April
11 May 2023
Battery-electric vehicle (BEV) registrations in the UK are struggling to meet expectations, as the country’s new-car market posted a ninth consecutive month of growth in April.
According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), a total of 132,990 passenger cars took to the roads last month, an increase of 11.6% on April 2022. This is the best performance in the month for the UK since 2021, yet the market remains significantly down on pre-COVID-19 levels, with 17.4% fewer registrations.
The year-on-year registration growth is partially due to the clearing of order backlogs. Carmakers were unable to make deliveries as quickly as they would have liked due to supply bottlenecks. However, supply-chain problems have eased over recent months and registration figures are improving, meaning there is promise for the overall UK new-car market.
However, the positive outlook was not enjoyed equally by all fuel types. Focus on zero-emission vehicles is intensifying, with carmakers prioritising their development over internal-combustion engine (ICE) variants. But external factors are beginning to impact adoption plans, with growth in the segment not as strong as expected.
‘The new car market is increasingly bullish, as easing supply chain pressures provide a much-needed boost,’ commented SMMT chief executive Mike Hawes. ‘However, the broader economic conditions and charge point anxiety are beginning to cast a cloud over the market’s eagerness to adopt zero-emission mobility at the scale and pace needed.
Cracks show in BEV uptake
Combined with mild-hybrid variants, petrol vehicles remained the dominant force in the UK market, with 77,275 registrations overall. This is up 5.5% on 2022, with the fuel types capturing a market share of 58.1%, highlighting ongoing demand for petrol, despite the push for more zero-emission vehicles.
BEVs remained the second most popular fuel type in April, with 20,522 passenger cars registered, increasing by 59.1% and holding 15.4% of the market. Plug-in hybrids (PHEVs) also performed well, with year-on-year growth of 33.3% and a total of 8,595 units registered.
While these figures look promising, the SMMT is less optimistic about BEV growth and has downgraded its expected market share from 19.7% to 18.4% this year. In addition, the outlook for 2024 has also been downgraded, from a share of 23.3% to 22.6% across the whole year.
Zero-emission vehicles may still be a popular choice in the new-car market, but they are struggling to erode the share of ICE models. In recent months, there have been several issues that impacted BEVs. This includes rising energy costs and the cost-of-living crisis. These factors have meant consumers are less likely to spend larger amounts of money on a vehicle, especially if it is already more expensive than a petrol or diesel model.
The average cost of charging a BEV at a rapid charger (23-99kW) has risen from 36.74p per kWh (42c/kWh) in September 2021 to 69.2p per kWh in April 2023, according to figures from the RAC Charge Watch. This means that charging a car with a 64kWh battery from 0% to 80% on a fast charge has risen from £18.81 to £35.43 in 18 months.
The average cost per mile of a BEV using a rapid charger is now 20p, while a petrol model costs 17p a mile to run. Even though domestic charging only costs 10p per mile, those without off-street parking, or unable to install a home charger due to restrictions, will rely on public infrastructure, and may fail to see benefits in standard running costs.
The SMMT believes that with a zero-emission vehicle mandate due to come into effect next year, more needs to be done to encourage drivers to purchase a BEV over an ICE model. This should include greater and faster investment in charging infrastructure, giving those who can only park on-street greater flexibility in their charging options, including overnight slow charging, as well as purchase incentives to help reduce the overall vehicle costs.
‘To ensure all drivers can benefit from electric vehicles, we need everyone – government, local authorities, energy companies and charging providers – to accelerate their investment in the transition and bolster consumer confidence in making the switch,’ added Hawes.
Overall growth expected in 2023
While the outlook for BEVs has been reduced for 2023, the overall impression of the UK’s new-car market remains positive. The industry continues to be buoyant despite order backlogs clearing and there is new confidence in the market.
Year-to-date figures show that new-car registrations are up 16.9% over the first four months of 2022, meaning the UK has had the best start to a year since the pandemic hit the country in 2020. This growth is worth around £3.2 billion to the UK economy.
Therefore, the SMMT has revised its quarterly market outlook upwards, for the first time since 2021, with 1.83 million registrations expected, up from 1.79 million in January. This puts projected market growth at 13.5%, which would be the best percentage gain since 1983.