EV growth hindered by lack of incentives
【Summary】The lack of consumer incentives in the Autumn Statement could hamper the growth of the electric vehicle (EV) market next year, according to the Society of Motor Manufacturers and Traders (SMMT). While overall new car registrations have surpassed pre-pandemic levels, EV growth has struggled to increase market share. The SMMT called for fiscal incentives for private consumers and a more equitable distribution of charging infrastructure.
An absence of consumer incentives in the November 22 Autumn Statement could lead to a lacklustre electric vehicles (EV) market next year. The motor industry is revising down growth to a 22.3% market share, according to figures released by the Society of Motor Manufacturers and Traders (SMMT). While the overall new car market in October beat pre-pandemic levels, the EV market struggled to increase its market share after 42 months of consecutive growth.
The growth in new car registrations was driven primarily by large fleet registrations, which saw a 28.8% increase. Private demand remained stable, while the business sector experienced a decline in registrations. Overall, vehicle uptake has increased by 19.6% in the first 10 months of the year, making it the best year for the market since 2019.
In October, EV uptake accounted for 37.6% of all new car registrations. Hybrid electric vehicles (HEVs) and plug-in hybrid vehicles (PHEVs) also saw growth, with PHEVs recording the highest proportional growth. Battery electric vehicle (BEV) uptake increased for the 42nd consecutive month, although its market share only rose slightly from last year. The SMMT highlighted the need for fiscal incentives for private consumers, as private registrations accounted for fewer than one in four new BEVs this year.
Chargepoint rollout in Q3 improved significantly, with the largest ever quarterly delivery of new standard chargepoints. However, installation was disproportionately focused on London and the South East, despite the region accounting for fewer new plug-in registrations. The SMMT emphasized the importance of more equitable distribution and pricing for public charging to influence EV uptake.
The SMMT and industry experts are calling on the government to introduce incentives and facilitate infrastructure investment in the upcoming Autumn Statement. They believe that attractive price incentives and increased charging infrastructure are crucial to continue the momentum of EV adoption. The delay in phasing out internal combustion engine vehicles from 2030 to 2035 has raised concerns, but manufacturers are using various tools, such as discounts and finance offers, to increase new electric sales.
Looking ahead to next year, the overall market outlook for 2024 shows a revised down market share for BEVs. Despite an expected increase in registrations, the market share is anticipated to be 22.3%. Industry experts suggest that similar tax incentives offered to fleet drivers could push more motorists to buy EVs and drive sales to even greater levels ahead of the switchover in 2035.
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