Electric Vehicles Comprise a Quarter of UK Car Sales in November

Industry data reveals that electric vehicles constituted one in four of all cars sold in the UK during the previous month. While electric car sales marked their eleventh consecutive month of growth in November, according to the Society of Motor Manufacturers and Traders (SMMT), this surge in new registrations was significantly influenced by substantial price reductions, as manufacturers strove to achieve challenging objectives. The SMMT reported that manufacturers offered “massive” discounts on electric vehicles (EVs), amounting to approximately £4bn. Although certain companies are anticipated to fall short of the government’s electric vehicle (EV) sales targets for the current year, potentially incurring penalties, existing rule flexibilities suggest that such fines are improbable. The regulations stipulate that car manufacturers must achieve a specific volume of EV sales; however, they possess the option to acquire sales credits from other companies or to “borrow” from their allocated quotas in subsequent years. Mike Hawes, SMMT chief executive, stated that manufacturers are investing in electric vehicles “at unprecedented levels” and “spending billions on compelling offers.” Nevertheless, he cautioned: “Such incentives are unsustainable – industry cannot deliver the UK’s world-leading ambitions alone.” Contrary to a broader decline observed in other vehicle categories, new electric car registrations defied this trend. While the majority of new car demand originated from fleet purchases by businesses, this segment experienced an overall decrease in sales. Private consumer sales similarly declined. New petrol car sales decreased by over 17%, diesel car sales by more than 10%, and both hybrids and plug-in hybrids saw reductions exceeding 3% and 1% respectively. The government has committed to engaging with car manufacturers to deliberate on electric vehicle targets. It has affirmed that these targets “will not be weakened” but will explore “flexibilities.” Manufacturers, however, have indicated that they cannot achieve the existing targets—which mandate that EVs constitute 22% of cars sold in 2024—without additional consumer incentives. This proportion currently stands at 18.7%, with an expectation of reaching 19% by the close of the year. Nonetheless, this situation still exposes them to the prospect of compensating other manufacturers that have accumulated credits through EV sales. Although a significant number of these companies are either Chinese or produce vehicles in China—such as the US firm Tesla—other automotive manufacturers might also possess credits. For an extended period, manufacturers have contended that subsidizing Chinese companies by purchasing credits is illogical. Earlier in the current month, both Ford and Stellantis, the parent company of Vauxhall, disclosed workforce reductions, which both attributed in part to the EV targets. However, both companies had previously expressed concerns regarding their long-term presence in the UK, citing alternative contributing factors. Ford ceased operations at its Bridgend factory in 2020, resulting in the elimination of 1,644 positions, with Covid cited as a contributing factor. In 2019, PSA Group, Vauxhall’s previous owner, indicated that Brexit posed a risk to its Luton facility. Broadly, companies based in the UK have been adopting the shift towards electric vehicles, exemplified by JLR’s Jaguar, which garnered considerable notice for its recent rebranding as an exclusively electric car manufacturer. Furthermore, several other automotive brands are exceeding the government’s electric vehicle targets. Data from the non-profit New AutoMotive indicates that Vauxhall’s EVs constitute 36% of its sales, Peugeot’s 29%, Renault’s 27%, MG’s 27%, and Skoda’s 23%. A spokesperson for the Department for Transport affirmed that the department is “alive to the global challenges the industry is facing.” The spokesperson further stated that the department is allocating £2.3bn “to support industry and boost the uptake of electric vehicles,” and emphasized that Labour’s manifesto pledge to discontinue new internal combustion engine cars by 2030 “has not changed.” Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the material on external websites. Information regarding our policy on external linking is available.