Private BEV registrations lag as UK records further new-car growth
05 October 2023
The UK’s new-car market recovery continued into a 14th month in September. However, concerns over private battery-electric vehicle (BEV) registrations are rising following another dip in deliveries.
The latest figures from the Society of Motor Manufacturers and Traders (SMMT) show that registrations in the UK grew 21% in September, with 272,610 passenger cars taking to the country’s roads. This was the second-busiest month of 2023 after March, as the traditional plate change effect helped boost sales.
Cars registered at different points in the year will display different registration markers, indicating a vehicle’s age and affecting its value. The first major plate change happens each March with a subsequent variation in September.
Although the monthly registrations increase will be welcomed by the industry, the clearing of a backlog brought about by the supply-chain crisis of 2021 and 2022 has skewed results. This is shown in the seasonally adjusted annualised rate (SAAR), which fell sharply in September to just 1.63 million. As the month is often one that produces most of the yearly sales volume, due to the plate change, the recently improved delivery figures are distorting the market.
The latest 2023 forecast, provided by EV-volumes.com (part of Autovista Group), has been revised downwards slightly, to 1.84 million registrations, representing a 14.5% increase compared to last year. For 2024 and 2025, volumes have been adjusted downwards marginally, but percentage changes have marginally increased, to 5.5% and 4.3% respectively.
ICE continues to lead
Petrol still dominated the UK automotive market in September. When including mild hybrids, the fuel type increased its registrations by 19.7% compared to the same month in 2022. In total, 151,846 new units took to the roads, representing 55.7% of the market. This was down 0.6% on 2022, while in the year-to-date figures, the technology held a 56.5% share, down 0.9% compared to the first nine months of last year.
Diesel registrations, including mild hybrids, remained stable, dropping just 0.1% in September to a market share of 6.9%, down 1.5% on last year. The fuel type, which once dominated the market is now in danger of being the least popular technology. It ended the month just 0.1% ahead of plug-in hybrids (PHEVs), which took a 6.8% share, thanks to a 50.9% increase in registrations.
Full-hybrid models also performed well, with 38,014 registrations meaning the powertrain ended September 30.7% up on last year, with a 13.9% market share.
The BEV conundrum
While the industry will likely be pleased with another month of growth following the supply-chain crisis of 2021 and 2022, there will be fears over the performance of BEVs amongst private buyers. Whether this is the result of a lack of confidence in the technology or the delayed effect of the withdrawal of the Plug-in Car Grant (PiCG) in 2022, remains to be seen.
The SMMT’s figures come on the back of several announcements by the UK government which have given clarity to the automotive industry. The biggest of these was the delay to the ban on sales of new petrol and diesel vehicles until 2035.
This has not changed the timeline for the exclusive sale of new zero-emission vehicles, which has always been set for 2035. However, it has added to a feeling of electric-vehicle (EV) unease which is being perpetuated by some media outlets in the country.
All-electric cars recorded their 41st month of growth in September, with an 18.9% increase year on year. Yet this was less than the overall market’s growth, and as a result, the BEV share slipped by 0.3%, to 16.6% last month.
The increase in registrations was driven entirely by fleet purchases, which rose 50.6%. Private BEV deliveries decreased for the second month in a row, with a 14.3% drop meaning less than one in 10 private buyers opted for the powertrain.
The shifting of the ban will not have affected registrations in September, as these are based on deliveries rather than sales. However, the axing of the PiCG in June 2022 could now be starting to impact the market.
Following the supply-chain crisis, a backlog built up, with some buyers waiting between 12-18 months for delivery. Therefore, vehicles ordered prior to the PiCG ending will likely have made their way to owners around July 2023. Sales of BEVs may have dipped in the months following the grant’s withdrawal, and this impact could now be affecting registration figures.
This is a problem for the UK’s automotive industry, especially with the announcement of the Zero-Emission Vehicle (ZEV) Mandate. This brings with it strict targets for ZEV sales up to and including 2035. Despite the policy change, the target has not been adapted, meaning that while carmakers can still sell new petrol and diesel models until 2035, BEVs will still need to be pushed by the end of the decade.
Come 2024, 22% of each carmaker’s fleet must be made up of ZEV sales, rather than registrations. This will rise each year, reaching 52% in 2028, 80% by 2030 and 100% by 2035.
With charging infrastructure still a cause for concern, and the introduction of BEV vehicle excise duty in 2025, it is becoming harder for many to justify the already expensive purchase of a BEV over an internal-combustion engine (ICE) counterpart.
Despite the UK now having the toughest zero-emission transition timeline in Europe, the country does not have any incentive scheme in place to entice private buyers, unlike other major markets in the region.
‘With tougher EV targets for manufacturers coming into force next year, we need to accelerate the transition, encouraging all motorists to make the switch,’ commented SMMT chief executive Mike Hawes.
‘This means adding carrots to the stick, such as creating private purchase incentives aligned with business benefits, equalising on-street charging VAT with off-street domestic rates and mandating charge point rollout in line with how electric vehicle sales are now to be dictated.’
EV-volumes.com has forecast that the BEV share of the UK new-car market will reach 17.4% in 2023, a gain of 0.8% on last year, with a 21.8% share forecast in 2024. While the ZEV Mandate states a target of 22% next year, this is for sales, rather than registrations.