EV growth risks hindered by lack of incentives
【Summary】The lack of consumer incentives in the upcoming Autumn Statement could hinder the growth of the electric vehicle (EV) market next year, according to the Society of Motor Manufacturers and Traders (SMMT). The SMMT revised down the growth of the EV market to a 22.3% market share. October saw a strong overall new car market, but EV growth struggled to increase market share. Fleet registrations drove the growth, while private demand remained stable.
An absence of consumer incentives in the November 22 Autumn Statement could lead to a lackluster electric vehicles (EV) market next year, with the motor industry revising down growth to a 22.3% market share.
Figures released by the Society of Motor Manufacturers and Traders (SMMT) show that while the October new car market beat pre-pandemic levels, the EV growth struggled to increase market share after 42 months of consecutive growth.
The 15th month of consecutive growth was driven almost entirely by large fleet registrations, while private demand remained stable and the business sector saw a decline in registrations. Overall, vehicle uptake has increased in the first 10 months, making it the best year since 2019.
In October, EV uptake continued to accelerate, accounting for a significant portion of new car registrations. Hybrid electric vehicles (HEVs) and plug-in hybrid vehicles (PHEVs) also experienced growth. However, the market share for battery electric vehicles (BEVs) only saw a relatively small rise compared to last year.
The SMMT emphasized the need for fiscal incentives for private consumers, as private registrations accounted for fewer than one in four new BEVs this year. The organization suggested reducing VAT on public charging to match home use and implementing binding targets for chargepoint rollout to accelerate installation.
Despite an increase in chargepoint rollout in Q3, the installation was disproportionately focused on London and the South East. The SMMT called for more equitable distribution and pricing for public charging to address perceptions of chargepoint infrastructure availability and accessibility.
The SMMT chief executive emphasized the importance of introducing incentives and facilitating infrastructure investment in the upcoming Autumn Statement to encourage all consumers to invest in zero emission vehicles.
The latest market outlook reflects higher-than-expected market growth for 2023. However, expectations for BEV uptake have been slightly downgraded. The dealership community is looking towards the Autumn Statement for clarity on policy, particularly regarding EVs.
The lack of charging infrastructure and price barriers remain key concerns for prospective EV consumers. Manufacturers are utilizing incentives to increase new electric sales, and retailers who can offer affordable electric cars with stock availability are expected to dominate the market.
There may be a drop in demand for alternative fuel vehicles (AFVs), including EVs, following the government's delay to the 2030 ban. Dealers will need to track changing trends and stock their forecourts accordingly.
The government's support in offering tax incentives to private car buyers, similar to fleet drivers, could further boost EV sales ahead of the switchover in 2035.
Looking ahead to next year, the overall market outlook for 2024 shows a slightly revised down market share for BEVs, despite expected growth in registrations.
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