There were just under 2m new car registrations last year in the UK but take up of electric vehicles (EVs) was below the government’s mandated levels, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).
The 1.953m new registrations reflected an increase of 2.6% on 2023 and was largely driven by fleets, which accounted for over 1.1m of the cars.
Private registrations fell by 8.7%, however, with small business uptake also down by 3.1%.
‘Lacklustre’ EV demand
A “lacklustre demand” among consumers was also given as a reason for the below-mandate take up of EVs, with only one in 10 going electric last year. Petrol-based cars continued to command 61% of private registrations.
The government’s mandated target for zero emission vehicle registrations for 2024 was 22% of overall take-up, but this figure was only 19.6% according to SMMT data. This was nonetheless a record high.
The body said that the industry has “pulled every lever to try and achieve this target”, including more than £4.5bn of discounting – a level it describes as “not sustainable in the long term”.
‘Rapid’ change needed
Mike Hawes, the chief executive of SMMT, welcomed the second successive year of overall growth in registrations, but warned that “rapid” regulatory review was needed to ensure consumers were playing their part in efforts to decarbonise the sector.
The government launched a public consultation into the UK’s transition towards zero emission vehicles on Christmas Eve last year.
Hawes said:
“A record year for EV registrations underscores vehicle manufacturers’ unswerving commitment to a decarbonised new car market, with more choice, better range and increased affordability than ever before.
“This has come at huge cost, however, with the billions invested in new models being supplemented by generous incentives which are unsustainable.
“We need rapid results from the regulatory review and urgent substantive support for consumers – else automotive investments will be at risk and the jobs, economic growth and net zero ambitions we all share in jeopardy.”
Global picture
Speaking to the Manufacturer last week, Hawes said that the government needed to introduce “incentives to stimulate demand, faster chargepoint infrastructure rollout, and more affordable charging.” He also noted that global competition in the sector is “only going to heat up in 2025 as countries vie for major new automotive investment”.
In 2024, the EV sector was at the heart of trade tensions between some of the world’s largest economies. China, which is the biggest exporter of EVs, has been accused by the US and European nations of implementing unfair subsidies for the sector, allowing it to flood Western markets with cheaper models. This led to the US raising tariffs on Chinese EVs to 100%, with the EU increasing its levies from 10% to 45% in October.
UK trade opportunity?
The UK, however, has not introduced its own tariffs on Chinese EVs, with business and trade secretary Jonathan Reynolds saying in October that no complaints had been made by UK businesses to the Trade Remedies Authority. He also said that his “primary concern” was for British automotive exports to remain competitive, with access to markets including China.
Hawes has made the point that the automotive sector is the UK’s “largest exporter of goods by value” and that he hoped support for the industry would be a part of the UK’s upcoming trade strategy.
“Britain’s new trade strategy, therefore, should have at its heart the world-class automotive products being developed and manufactured here, with beneficial free and fair trade deals opening doors in existing and emerging markets.
“The prize is significant and, as part of a wider industrial plan, could amount to £50bn growth in the next decade.”
Paul Brooks, the manufacturing lead at the Chartered Institute of Export & International Trade, agreed with Hawes that the sector needs support from the government to remain competitive internationally.
“The EV market is increasingly competitive and contested at a global level, so it’s key that UK producers get the support they need from the government as part of the upcoming Trade Strategy.
“Improving the conditions for domestic consumer demand is a key part of this – if the home market grows, this will help auto firms to remain profitable, creating a better base from which these firms can export.
“It’s clear that auto exports are very important to the UK economy and that this needs to be maintained to ensure auto jobs stay in the country.”
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