EV market future threatened by regulatory uncertainty

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【Summary】The EV market saw a boost in August, with battery electric cars accounting for 20.1% of new car registrations. However, regulatory uncertainty surrounding the Zero Emission Vehicle Mandate threatens future ambitions. The market grew by 24.4% in August, but remains -7.5% below pre-pandemic levels. Large fleet and business registrations increased, while private demand softened. The industry warns that without clarity on the mandate, decarbonization goals may be at risk.

FutureCar Staff Sep 05, 2023 9:22 AM PT

EV market future threatened by 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). While August is typically a quieter month with many buyers choosing to wait until the September numberplate change, an increase of 16,799 units means the sector is now entering a second year of growth. Despite this improved performance, the market still remains -7.5% below pre-pandemic levels.1

The increase was fuelled by a surge in registrations by large fleets, rising 58.4% to 51,951 units, while business registrations grew 39.4% to 1,635 units. Conversely, private demand softened by -8.1%, compared with a supply-constrained 2022 market.

Demand for electrified vehicles continued to grow, accounting for almost four in 10 (37.8%) new cars reaching the road. Battery electric vehicle uptake swelled by 72.3% to secure a 20.1% market share, an August record and the highest recorded since last December. Plug-in hybrid uptake also rose significantly, by 70.0%, to account for 7.7% of new registrations. Hybrid volumes remained relatively stable with a 6.8% increase, comprising 10.0% of the market.

However, with less than four months to go until the expected introduction of a Zero Emission Vehicle Mandate, industry still has no sight of the proposed regulation. The automotive sector is committed to Net Zero but the diminishing time threatens the ability of the market to move. Demand from both business and private consumers must be boosted still further if ambitions are to be met, but while businesses benefit from fiscal incentives to switch, there is no similar package for the private consumer market.

Mike Hawes, SMMT Chief Executive, said,

"With the automotive industry beginning a second year of growth, recovery is underway with EVs energising the market. But with a new Zero Emission Vehicle Mandate due to come into force in less than 120 days, manufacturers still await the details. Businesses cannot plan on the basis of consultations, they need certainty. And now, more than ever, government must match action to ambition, ensuring there are the incentives and infrastructure in place to convince drivers to make the switch."

Notes to editors

1 August 2019 registrations: 92,573