SMMT: Unprecedented EV discounting shores up September new automobile market

The UK new automobile market rose 1.0% in the important thing ‘74’ plate change month of September, to 275,239 items, based on the newest figures from the Society of Motor Producers and Merchants (SMMT). In what’s historically a bumper month for brand spanking new automobile registrations, second solely to March, the efficiency was the very best since 2020, however nonetheless -19.8% off pre-Covid September 2019.¹

Progress was pushed by fleet purchases, up 3.7% to 149,095 items and representing 54.2% of the general market. Non-public shopper demand fell, by -1.8% to 120,272 items, accounting for 43.7% of registrations, whereas the smaller enterprise sector noticed volumes fall -8.4% to five,872 items.

Uptake of plug-in hybrids (PHEV) grew sooner than some other gasoline kind within the month, up 32.1% to take an 8.9% share of the market. Hybrid electrical automobile (HEV) registrations rose 2.6%, boosting market share to 14.2%, whereas petrol and diesel registrations declined by -9.3% and -7.1% respectively, though collectively they had been nonetheless the selection of 56.4% of consumers in September.

Demand for the newest battery electrical autos (BEV) hit a brand new document quantity for any month in September, up 24.4% to 56,387 items, attaining a 20.5% share of the general market, up from 16.6% a yr in the past. This was not sufficient, nonetheless, to shift market share considerably, which edged up from 17.2% within the first eight months, to 17.8% from January- September. It’s anticipated to succeed in 18.5% by the tip of the yr.

Fleets drove a lot of this development, with deliveries rising 36.8% to account for greater than three quarters (75.9%) of BEV registrations. Non-public BEV demand additionally rose, up 3.6% after unprecedented producer discounting, however this was equal to simply 410 extra registrations. Client demand for diesel grew at a sooner price, rising 17.1% in September – a quantity uplift of 1,367 items.

12 months-to-date non-public BEV demand stays down -6.3% – underlining the dimensions of the problem concerned in shifting the mass market to satisfy the mandated targets that had been conceived in very completely different financial, geopolitical and market circumstances. Earlier assumptions of a market delivering regular BEV development, cheaper and plentiful uncooked supplies, reasonably priced vitality and low rates of interest haven’t come to fruition, with the upfront value of BEV fashions remaining stubbornly excessive. Added to that is shoppers’ insecurity within the UK’s charging provision – regardless of current funding and development – which nonetheless acts as a barrier to BEV take up.

In an effort to offset this underlying paucity of demand, SMMT calculates that producers are on the right track to spend not less than £2 billion on discounting EVs this yr.² Given the numerous billions already invested to develop and convey these fashions to market, the state of affairs is untenable and threatens producer and retailer viability. Because of this, SMMT and 12 main automobile producers representing greater than 75% of the market, have right now written to the Chancellor calling for measures to help shoppers and assist velocity up the tempo of the EV transition. These embody:

• Quickly halving VAT on new EV purchases to place greater than two million new ZEVs (relatively than petrol or diesel) on the street by 2028³
• Scrapping the VED ‘costly automobile’ tax complement for ZEVs, due subsequent yr, to keep away from penalising consumers
• Equalising VAT on public charging to match the 5% house charging price, and mandating infrastructure targets to help those that can’t cost at house
• Sustaining and increasing the enterprise incentives which can be working, together with Profit in Type which helps firm vehicles and people on wage sacrifice schemes, and the necessary Plug-in Van Grant

Mike Hawes, SMMT Chief Govt, stated,

September’s document EV efficiency is sweet information, however look below the bonnet and there are critical issues because the market shouldn’t be rising rapidly sufficient to satisfy mandated targets. Regardless of producers spending billions on each product and market help – help that the business can’t maintain indefinitely – market weak spot is placing environmental ambitions in danger and jeopardising future funding. Whereas we admire the pressures on the general public purse, the Chancellor should use the forthcoming Price range to introduce daring measures on shopper help and infrastructure to get the transition again on observe, and with it the financial development and environmental advantages all of us crave.

1 343,255 registrations September 2019
2 £2 billion primarily based on common low cost reported by Auto Dealer on BEVs in September of 12.1% as proportion of common retail worth of a brand new BEV (£49,600, primarily based on JATO knowledge) multiplied by SMMT’s full yr BEV market outlook of 364,000 items. To notice this doesn’t embody finance gives or incentives given to massive fleets
3 SMMT calculations

SOURCE: SMMT