New car market hits ‘million motors’ milestone at half year

NFDA

June’s market growth was driven primarily by the fleet sector, where uptake rose by 14.2 per cent, while private retail demand fell for the ninth consecutive month, down -15.3 per cent. Retail buyers accounted for fewer than four in 10 new cars registered (37.7 per cent).
Electrified vehicle uptake continued to grow robustly in June, with plug-in hybrid (PHEV) volumes up 30.0 per cent to reach a 9.3 per cent market share, while hybrid electric vehicles (HEV) rose 27.2 per cent to achieve 14.9 per cent of the market. Both powertrains also outpaced battery electric vehicle growth (BEV), which rose 7.4 per cent but took its highest monthly share this year, accounting for 19.0 per cent of all new vehicle registrations.

The UK’s zero emission transition – and the ability of manufacturers to meet the requirements of the Vehicle Emissions Trading Scheme – currently relies on the fleet sector as private consumer uptake continues to soften. Private BEV uptake has fallen -10.8 per cent year to date, with fewer than one in five new BEVs going to private buyers. Overall, BEVs now comprise 16.6 per cent of the new car market so far this year, slightly above the 16.1 per cent achieved in the same period last year, with uptake behind the levels mandated by government.
With the UK heading to the polls today, the automotive industry calls on the next government to provide greater support to the consumer on the journey to zero emission mobility. Re-instating fiscal incentives for the private consumer by way of a halving of VAT on BEVs for three years would re-energise the market, putting an additional 300,000 private BEVs – rather than petrol or diesel cars – on the road over the next three year, on top of current outlooks. This would help ensure that in 2035, half of all cars in use would be zero emission, cutting road transport CO2 emissions by 175 million tonnes between now and then.

Vehicle Excise Duty plans should also be revised so zero emission vehicles (ZEVs) are classed as essential rather than “luxury” vehicles, by amending the ‘expensive car’ supplement due to be applied from next April. In addition, public charge point use could be made fairer by reducing VAT from 20 per cent to 5 per cent, in line with home charging – a move that would support ZEV uptake and send the right message to consumers. Mike Hawes, SMMT Chief Executive, said: “The year’s midpoint sees the new car market in its best state since 2021 – but this belies the bigger challenge ahead. The private consumer market continues to shrink against a difficult economic backdrop, but with the right policies in place, the next government can re-energise the market and deliver a faster, fairer zero emission transition. All parties are agreed on the need to cut carbon and replacing older fossil fuel-based technologies with new electrified powertrains is the essential step to achieving that goal.”

NFDA warns government about complacency

Commenting on the figures, Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK, said: “Although the new electric vehicle market has seen another month of growth, the overall year-to-date market share of electric vehicles remains well below the 22 per cent target stipulated by the Zero-Emission Vehicle Mandate. Private demand continues to lag behind fleet, making it clear that revitalising the private electric vehicle market is a pressing issue that must be addressed immediately.

“Despite the new car market’s resilience, with nearly two years of continuous growth, NFDA urges the next government to avoid complacency. Numerous challenges remain, as detailed in NFDA’s General Election manifesto, including the need to reinvigorate the private electric vehicle market as well as address the ongoing skills shortage.

“As the public heads to the polls today, dealerships, through the NFDA, have repeatedly emphasised the importance of these issues in the next government agenda, notably through NFDA’s recent General Election survey.

“NFDA urges the next government to work closely with us and the broader industry to tackle the concerns of dealerships and further unleash the potential of this dynamic sector as we enter the second half of the year.”