Record-breaking January for EV sales, fueled by consumer shift towards electric and partially electric vehicles. While market shrinks, BEVs capture 21% share, highlighting demand growth. Manufacturers call for incentives and policy support to meet government targets.
Demand for electric vehicles surged in January, outpacing a broader decline in the car market that industry experts attribute to waning business and consumer confidence. Battery electric vehicles (BEVs) captured a record 21% share of nearly 140,000 new car registrations in January, marking a 41.6% year-on-year increase. This positions BEVs as the second-largest segment in the new car market, trailing only gasoline vehicles, which contracted by 15% to comprise just over 50% of registrations.
The overall market shrunk by 2.5%, with diesel registrations dipping to just over 6% of the total. Hybrid electric vehicles accounted for 13% of the market, while plug-in hybrids made up 9%, underscoring a notable shift in consumer preference toward electric or partially electric powertrains.Despite the robust growth in electric vehicle sales, manufacturers continue to express concerns that the market may not sustain the required growth to meet government EV targets. They are calling for government incentives and extensions to existing tax breaks to bolster demand. Under the net-zero targets established by the previous administration, manufacturers face fines of £15,000 per vehicle if electric vehicle sales fall short of 28% of total production this year, an increase from 22% in 2024. The current government has reaffirmed its commitment to phasing out the sale of new petrol and diesel cars by 2030 but is currently reviewing the target regime to allow for greater flexibility. Manufacturers that fall short of their targets can purchase credits from competitors who exceed EV market share or offset them through emission reductions elsewhere in their operations. Last year, this mechanism enabled the industry to meet its 22% target despite vehicle sales of just below 20%.The Society of Motor Manufacturers and Traders (SMMT) has warned that EV sales are projected to reach only 23.7% this year, and this growth will be largely driven by discounting, which the SMMT estimates cost the industry £4.5 billion last year. As the market is largely driven by company fleet sales, which benefit from tax breaks, the SMMT has urged the government to introduce consumer incentives to support private purchases and called for the abandonment of plans to implement vehicle excise duty (VED) in April. These plans would subject BEVs costing more than £40,000, currently exempt from tax, to the 'expensive car supplement.' 'January's figures show EV demand is growing - but not fast enough to deliver on current ambitions,' said SMMT chief executive Mike Hawes. 'Affordability remains a major barrier to uptake, hence the need for compelling measures to boost demand, and not just from manufacturers. 'The application, therefore, of the 'expensive car supplement' to VED on electric vehicles is the wrong measure at the wrong time. 'Rather than penalising EV buyers, we should be taking every step to encourage more drivers to make the switch, helping meet government, industry and societal climate change goals.' The Energy and Climate Intelligence Unit, a think tank, hailed the figures as a positive start to the year, stating that the British automotive industry is on track to meet its annual target if EV sales maintain their recent growth trajectory. 'It's a record-breaking January for EV sales, and the sixth month on the bounce in which more than one in five new cars sold in the UK was an EV,' said transport lead Colin Walker. 'This comes on the back of the car industry as a whole successfully complying with the government's EV targets in 2024, with prices driven down as manufacturers compete for sales. 'Last January, EVs accounted for 14.7% of all cars sold, but sales grew throughout the year, allowing the industry as a whole to comply with the ZEV mandate in its first year. This has been a stronger start to the year, meaning the car industry looks even better set to hit its EV targets in their second year.
ELECTRIC VEHICLES EV SALES AUTOMOTIVE INDUSTRY GOVERNMENT TARGETS CONSUMER DEMAND BATTERY ELECTRIC VEHICLES FUEL ECONOMY CLIMATE CHANGE TAX INCENTIVES
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