New cars in a showroom

September marks one million EV milestone

Thursday, October 6, 2022 - 08:45
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The UK new car market recorded its second successive month of growth in September, with registrations rising 4.6%, according to the latest figures released today by the Society of Motor Manufacturers and Traders (SMMT). During what is typically the second biggest month of the year for the sector, 225,269 cars joined Britain’s roads. While this was a 9,957 unit increase on last year, when the industry recorded its weakest September since 1998,1 overall registrations for the month are still some -34.4% below pre-pandemic levels as the industry continues to battle issues constraining supply to fulfil a backlog of orders.2

Bucking recent trends, registrations by large fleets grew by 12.5% or 11,315 units, although this still represents a significant (-39.7%) decline on pre-pandemic volumes.3 Registrations to private buyers, meanwhile, fell by -3.6%.

Electric vehicle uptake continued to rise, albeit at a slower rate of growth than seen earlier in the year, with the second highest monthly volume of battery electric vehicle (BEV) registrations in history, up 16.5% to 38,116 units.4 Although registrations of plug-in hybrid vehicles (PHEVs) declined by -11.5% to 12,281 units, overall plug-in vehicles accounted for more than one in five new cars joining UK roads in the month. As a result, almost quarter of a million (249,575) have now been registered in 2022 – meaning that UK drivers and fleets have now registered more than one million plug-in EVs, a quarter of which in this year alone.5

Hybrid electric vehicle (HEV) registrations, meanwhile, grew by 16.5% to 29,088 units in the month, as petrol powered cars grew 4.3% to 126,873 units and diesels declined by -14.5% to 18,911.6

In terms of segments, the largest growth was seen in multi-purpose vehicles, which rose 509.2%, adding more than 10,000 units, to 12,068, a result of key new model availability. Superminis remained the most popular segment overall, accounting for 30.9% of all registrations.

While growth is welcome following a torrid first half of the year, total registrations for 2022 remain down -8.2% on a weak 2021 performance and more than a third (-35.1%) below the first three quarters of pre-pandemic 2019, equivalent to 653,903 fewer units.7

Mike Hawes, SMMT Chief Executive, said, “September has seen Britain’s millionth electric car reach the road – an important milestone in the shift to zero emission mobility. Battery electric vehicles make up but a small fraction of cars on the road, so we need to ensure every lever is pulled to encourage motorists to make the shift if our green goals are to be met.

“The overall market remains weak, however, as supply chain issues continue to constrain model availability. Whilst the industry is working hard to address these issues, the long-term recovery of the market also depends on robust consumer confidence and economic stability.”

Meryem Brassington, electrification propositions lead at Lex Autolease said: “September is traditionally associated with a spike in new registrations, as drivers take advantage of the new number plate change. Today’s figures are a strong indicator that the new car market is slowly showing signs of recovery amid inflationary pressures and global supply chain challenges.

“What remains impressive is the continued growth of battery electric vehicles, with the market well on track to surpass last year’s overall registrations. Businesses and private drivers are embracing the transition to electric and reaping the many environmental and cost-saving benefits it offers. Yet, significant challenges lie ahead. EV drivers face a hike in charging costs and further clarity is needed on company car tax tables beyond 2025 to give fleet managers the confidence they need to make long-term purchasing decisions. All eyes will be on the government in the months ahead to ensure that the goodwill and progress made along the road to zero already this year doesn’t start to stall.”

Kim Royds, EV Director at British Gas, said: “The introduction of the new number plate in September brought with it a spike in EV adoption figures as drivers invested in the latest car models.

“As the rate of EV adoption climbs, so does the pressure on the UK’s network of charging points, particularly the demand for super-fast charging which offers more convenience for drivers.

“The continued uptake of EVs is dependent on government and policy makers ensuring the rollout of the charging network is done properly. This means focusing on accessibility, convenience for users, and ensuring the latest technology – including super-fast chargers – is put in place to build a network fit for future purpose.”

Karen Johnson, Head of Retail & Wholesale at Barclays Corporate Banking, said: “Could we be seeing a run on new cars? Dealers across the country have reported surging demand in recent weeks as buyers look to get ahead of rising interest costs. Whilst we have seen some short term relief on supply allowing dealers to meet the back-log of orders, there are still significant delays to contend with going forward. Dealers need more vehicles on their forecourts to benefit from this increased consumer appetite, and they need them soon.

“Looking ahead, dealers will be worried about the long term impact of rising finance costs on demand for new cars – but for now they’ll just be celebrating their first positive month since February.”

Jon Lawes, Managing Director, Novuna Vehicle Solutions: “Supply constraints and economic uncertainty have stifled what is usually a bumper month for the motor industry. Nevertheless, demand for electric vehicles has been the positive takeaway for the motor industry this year. Registrations of battery powered vehicles (BEVs) for the year to date are up 40.3% on this time last year.

“Welcome as it is, the BEV boom has raised big questions about the UK’s charging infrastructure. The ratio of electric cars to public charge points has risen from 5:1 in 2019, to 15:1 today, and unless we see some meaningful progress on the Government’s EV infrastructure strategy, and soon, we could be facing a ratio closer to 54:1 by the end of this decade. If queues for cars become queues for chargers, it could throw a stick into the spokes of the growth plan we have been hearing so much about this week.”

Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, said: “New car registrations grew in September by 4.6% compared to the same period last year. In the month that saw the new 72 plate introduced, fleet sales saw a significant uptick in fortunes, growing 12.5%, whilst private sales saw a dip of -3.6%.

“However, this growth will be treated with some caution as it comes from a very low base and, with just 225,269 cars sold last month, September 2022’s registrations remain below the pre-pandemic average.

“As a result, year-to-date sales at the end of Q3 are down -8.2% on last year. With supply constraints still a reality and the cost-of-living crisis continuing, there is little sign of the industry being able to recover lost sales. Looking to Q4, rising interest rates will make the cost of financing a new car more expensive and many consumers will be delaying major purchases due to higher bills elsewhere. Although order books generally remain full for the rest of the year, it is likely that the number of enquiries will fall, raising questions amongst some dealers about prospects for 2023. 

EVs

“Despite ongoing struggles experienced across the sector, battery electric vehicles continue to grow in popularity; volumes were up 16.5% in September compared to the same period last year, accounting for a 16.9% market share.

“Year-to-date, battery electric vehicles account for 14.5% of all new cars sold. This can be explained, in part, by some manufacturers prioritising the production of battery electric vehicles as semiconductor supplies remain constrained.

“With rising energy prices taking effect, there has been some concern that the cost of charging an EV is now, per mile, comparable to filling a car up with petrol. However, these figures are based on the cost of public charging stations which is typically higher than charging at home.

“With new EV models coming to market, this should encourage more consumers to switch over time. In the UK, sales of battery electric vehicles continue to grow more quickly than plug-in-hybrids which are now seeing sales decline.

“In terms of cost, too, there are still major savings to be had by switching to an EV via a company car scheme. Based on the current Benefit-in-Kind tax scheme, an EV can be over 90% cheaper than a petrol or diesel car if all the savings are passed on from the employer to the employee.”


1 September 2021 registrations: 215,312
2 September 2019 registrations: 343,255
3 September 2019 fleet registrations: 168,850
4 March 2022 BEV registrations: 39,315
5 Total BEV and PHEV registrations Jan 2010-Sept 2022: 1,002,157
6 ICE and MHEV ICE combined
7 Registrations January to September 2019: 1,862,271

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