David Borland, EY UK & Ireland Automotive Leader, comments on the Society of Motor Manufacturers and Traders (SMMT) new car registration figures for August 2023:
“There were 85,657 new car registrations in August, representing a 24.4% year-on-year increase. This was a thirteenth successive month of growth which demonstrates the strength and resilience of the UK’s automotive sector against a persistently challenging economic backdrop and stubborn headwinds for manufacturers, dealers and consumers.
“Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) achieved the highest market share of the year so far, accounting for almost 28% of the market in August. Indeed, both BEVs (72.3%) and PHEVs (70%) were once again up significantly year-on-year. Fleet registrations continued to dominate the overall growth with a 58.4% increase and over 60% market share, compared to a reduction in the private market of -8.1%. This is in part due to Electric Vehicle (EV) growth for company car users and end consumers being impacted by economic challenges, despite some manufacturers continuing to prioritise lower pricing for EVs.
“Chinese manufacturers continue to enter more models into Europe, with one analyst commenting that their share of the European electric car market has more than doubled in less than two years as the world’s second largest economy ramps up efforts to take the lead in the transition away from petrol and diesel cars.
“However, these positives for Original Equipment Manufacturers (OEMs) and dealers looking to bolster their EV sales growth are counterbalanced by declining residual values of EVs, which could yet have a marked impact on their longer-term desirability.
“Despite the planned introduction of the Zero Emissions Vehicle (ZEV) Mandate now less than four months away, there is still a lack of clarity on what the impact will be for the industry, and any potential delay to the Mandate could limit the impact the automotive sector is having on the UK’s pursuit of decarbonisation goals. Despite advances in vehicle development technology that brings new products to market faster, this needs to be addressed as automotive is still very much a long product cycle business, and regulation will undoubtedly have a key role to play.”