May 18, 2022

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Half the Automotive

UK electric vehicle sales soar, despite slump in automotive market


UK electric vehicle sales soar, despite slump in automotive market

In total, EVs accounted for more than a third of new car registrations

The Society of Motor Manufacturers and Traders (SMMT) published its monthly trends results earlier this week. The SMMT notes that supply chain shortages have hit the automotive market in what is usually its biggest month of the year.

New car registrations in the UK last month fell by more than 14% to 243,479. Traditionally, March accounts for around 20% of total annual registrations, yet 2022 marks the weakest monthly results for the month since 1998. Overall Q1 registrations for 2022 were down by almost 2%.

The SMMT notes supply chain disruptions – namely in regards to semiconductors – as the main reason for the decline. Diesel and petrol vehicle sales were down 55% and 26% on 2021 levels respectively.

Despite the overall decline in new car registrations, the SMMT notes that BEVs enjoyed “tremendous growth” with almost 40,000 new registrations. This is an increase of more than 78% compared to 2021, with BEVs accounting for 16.1% of the overall market share – the highest ever volume of BEV registrations recorded in a single month.

SMMT adds that more BEVs were registered in March 2022 than across the entirety of 2019.

Other types of electric vehicles (EVs) fared differently. Plug-in hybrid (PHEVs) registrations declined by 7.5% to 16,037 units, but hybrids (HEVs) grew 28.4% to 27,737 units. In total, EVs accounted for more than a third of new car registrations.

Business registrations also grew by 20% in March.

SMMT’s chief executive Mike Hawes said: “March is typically the biggest month of the year for the new car market, so this performance is deeply disappointing and lays bare the challenges ahead. While demand remains robust, this decline illustrates the severity of the global semiconductor shortage, as manufacturers strive to deliver the latest, lowest emission vehicles to eagerly awaiting customers.

“Placing orders now will be beneficial for those looking to take advantage of incentives and lower running costs for electric vehicles, especially as the Ukraine crisis could affect supply still further. With increasing household and business costs, government must do all it can to support consumers so that the growth of electric vehicles can be sustained and the UK’s ambitious net zero timetable delivered.”

EV strategy

Last month, the UK Government published a new Electric Vehicle Infrastructure Strategy, confirming £1.6bn of public funding for charging points.

he Strategy builds on the commitment made by the UK Government in 2020 for at least £1.3bn of investment in electric vehicle (EV) charging before the next General Election.

In terms of funding, the Strategy details an additional £500m of investment from Whitehall’s coffers into “high-quality” public charging infrastructure across the UK. £450m of this will be used to create a Local Electric Vehicle Infrastructure Fund (LEVI), under which local authorities will be able to bid for funding to install charging hubs and on-street charging points. The remaining £50m will be used to upskill and employ staff to work on public charging point planning and implementation.

Each local council will be able to bid for a share of £10m under the LEVI.

The DfT has stated that its overarching ambition is to ensure that charging an electric vehicle (EV) will become cheaper and easier than refuelling a petrol or diesel car. It is estimating that England will quadruple its stock of rapid charging points by 2025. When all charging points are taken into account – rapid and otherwise – the Government is targeting a tenfold increase by 2030.

The Government has been keen to emphasise how the EV transition can be a solution to the current energy price crisis and accelerate the UK’s shift away from foreign fossil fuel imports. Yet, at the Spring Budget, a 5p cut to road fuel duty was announced, which seems to contradict this rhetoric.

 

 

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