February’s figures reinforce the robust performance of the UK automotive sector, maintaining a strong start to 2024 and signalling a nineteenth month of consecutive growth, said Sue Robinson, Chief Executive of the National Franchised Dealers Association, commenting on the latest SMMT new passenger car registration figures.
In February, a total of 84,886 new cars were registered, an increase of 14.0% from the same period last year. Sales to private buyers decreased by -2.6%; fleet registrations were up by 25.2%.
In Wales, just a single registration separated the top two models and another single figure was between 3rd and 4th, while two models tied for 8th position in the charts.
Battery electric vehicles experienced an increase, up 21.8% to 14,991 units. Plug-in hybrid registrations increased by 29.1% to 6,098 units, and hybrids followed with growth of 12.1% to 10,801 units. There are 35,926 registered BEVs on the road in 2024 compared to the 29,607 units at the same point last year, a 21.3% increase.
With sales of electric growing, diesel fell from 5,397 units to 4,995 units (-7.4%), but petrol has risen from 42,378 units to 48,001 units (13.3%).
Sue Robinson added, “It is promising to see that electric sales continue to grow after a bounce back last month, particularly as OEMs seek to meet the targets set by the ZEV mandate for this year. In recent months, this has primarily been driven by fleet rather than private demand.
“In spite of encouraging progress, it is crucial that the Government continues to work with dealers to attain the best outcomes for consumers.
“The Spring Budget provides a prime opportunity for the Government to keep this momentum going. NFDA urged the Government, in its Spring Budget submission, to increase consumer confidence in EVs through price incentives and improving electric charging infrastructure. NFDA also stressed to the Government to prioritise investment and growth in the UK automotive sector.”
Welsh car dealers reported a rise over 12% in February registrations compared to a year ago. Showrooms reported 2,675 new cars registered in Wales and taking the January and February total to 7,883 new cars, an 8.6% increase over the same period and before the 24-plate was introduced this month, suggesting there were very big incentives from manufacturers to boost all sales particularly for electric cars.
While February’s growth is positive and demonstrative of ongoing robust demand for the latest vehicles, the long-term picture will become clearer in March, the busiest market month. While BEV market share and volumes continue to grow during the first year of mandated targets for manufacturers, the increase in uptake is entirely sustained by fleets, thanks to compelling fiscal incentives. Private buyers account for fewer than one in five (18.2%) new BEVs registered in 2024 so far.
A faster, fairer market transition depends on more private buyers switching but the lack of significant incentives is holding back many, said the SMMT.
Tomorrow’s Budget is an opportunity for the Chancellor to stimulate demand by halving VAT on new EVs for three years, amending proposed Vehicle Excise Duty (VED) changes, and reducing VAT on public charging in line with home charging.
While consumers do not pay VAT on other emission reduction technologies such as heat pumps and solar panels, private EV buyers pay the full 20% levied on all cars, whether they be electric, petrol or diesel.
Halving VAT on new EV purchases would save the average buyer around £4,000 off the upfront purchase price – yet cost the Treasury less than the Plug-in Car Grant that was scrapped in 2022
Similarly, upcoming changes to Vehicle Excise Duty next year would see the majority of BEV buyers effectively penalised £1,950 for going electric due to the ‘expensive car’ supplement. Furthermore, those unable to charge a BEV at home currently pay a ‘pavement penalty’ of 20% VAT on public charging – quadruple the rate paid by those with the opportunity to charge at home.