EV market faces regulatory uncertainty

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【Summary】August saw a 24.4% increase in new car registrations, with battery electric cars accounting for 20.1% of new cars on the road. However, the automotive industry is concerned about the lack of details regarding the Zero Emission Vehicle Mandate, which puts decarbonization goals at risk. Businesses and private consumers need more incentives and infrastructure to switch to electric vehicles.

FutureCar Staff Sep 05, 2023 6:18 AM PT

The new car market grew 24.4% in August with 85,657 new vehicles registered, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). This increase of 16,799 units means that the sector is now entering a second year of growth, despite still being -7.5% below pre-pandemic levels.

The growth in registrations was primarily driven by large fleets, which saw a 58.4% increase to 51,951 units. Business registrations also grew by 39.4% to 1,635 units. However, private demand softened by -8.1%, likely due to supply constraints in the market.

One notable trend in the market is the increasing demand for electrified vehicles. In August, almost four in 10 new cars registered were electrified, accounting for 37.8% of the market. Battery electric vehicles saw a significant increase of 72.3%, securing a 20.1% market share, the highest recorded since last December. Plug-in hybrid vehicles also saw a substantial rise of 70.0%, accounting for 7.7% of new registrations. Hybrid vehicles remained relatively stable with a 6.8% increase, comprising 10.0% of the market.

However, there is concern within the industry regarding the delay in the details of the proposed Zero Emission Vehicle Mandate. With less than four months until its expected introduction, manufacturers still have no sight of the regulation. This poses a risk to decarbonisation goals, as the market's ability to transition to zero-emission vehicles is hindered. To meet these goals, both business and private consumer demand must be further boosted. While businesses benefit from fiscal incentives, there is currently no similar package for the private consumer market.

Mike Hawes, SMMT Chief Executive, emphasized the need for certainty and action from the government. With recovery underway and EVs driving the market, manufacturers require the details of the Zero Emission Vehicle Mandate to plan effectively. Hawes called for incentives and infrastructure to be in place to convince drivers to make the switch to electric vehicles.

Notes to editors: August 2019 registrations were 92,573.