EV market future in jeopardy due to regulatory uncertainty

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【Summary】August saw a 24.4% growth in the new car market, with battery electric cars accounting for 20.1% of new registrations. However, the industry warns that the lack of details on the Zero Emission Vehicle Mandate poses a risk to decarbonization goals. The market is still below pre-pandemic levels, and both business and private demand need to be further boosted to meet ambitions. The automotive sector is calling for incentives and infrastructure to convince drivers to switch to electric vehicles.

FutureCar Staff Sep 05, 2023 4:23 PM PT

EV market future in jeopardy due to regulatory uncertainty

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 surge in registrations was driven by large fleets, which saw a 58.4% rise to 51,951 units. Business registrations also grew by 39.4% to 1,635 units. However, private demand softened by -8.1% compared to the previous year.

Electric vehicles continued to gain popularity, accounting for almost four in 10 (37.8%) new cars registered. Battery electric vehicle uptake saw a significant increase of 72.3%, securing a 20.1% market share, the highest recorded since last December. Plug-in hybrid uptake also rose by 70.0%, accounting for 7.7% of new registrations. Hybrid volumes remained stable with a 6.8% increase, comprising 10.0% of the market.

However, the automotive industry is concerned about the lack of details regarding the proposed Zero Emission Vehicle Mandate, which is expected to be introduced in less than four months. Without clear regulations, the industry's ability to achieve its decarbonization goals is at risk. The government must provide certainty and take action by implementing incentives and infrastructure to encourage consumers to switch to electric vehicles.

Mike Hawes, SMMT Chief Executive, emphasized the need for certainty and action from the government, stating that businesses cannot plan based on consultations alone. He stressed the importance of matching ambition with incentives and infrastructure to drive the transition to electric vehicles.

August 2019 registrations stood at 92,573, highlighting the growth in the market since then.