Government claims UK’s transition from fossil fuel vehicles is ‘accelerating at speed’, despite slight dip in EV sales in April in wake of cut to payments from popular grant programme
The government today hailed another major milestone for the UK electric vehicle (EV) market, as official sales figures confirmed there were now over half a million zero emission cars on the roads. But the celebrations were tempered somewhat by the news auto industry trade body the SMMT has revised its expectations for sales of battery electric vehicles (BEVs) this year downwards in light of the government’s decision to slash the plug-in car grant.
In an update published this morning, the industry group said it expected BEVs to account for 8.9 per cent of new UK car registrations by year-end, a reduction on its 9.3 per cent forecast from January.
The group changed its outlook for the year ahead as it released sales figures for the month of April which revealed plug-in hybrids (PHEVs) had been more popular than battery electric vehicles (BEVs), a switch it attributed to the government reducing the plug-in car grant in March.
The plug-in vehicle market followed a trend seen in recent months, accounting for one in eight electric vehicle sales, the SMMT said, with pure electric cars taking a 6.5 per cent market share and plug-in hybrids 6.8 per cent of the market. However, monthly BEV uptake was down compared with the first couple months of 2021, when they had been running 7.5 per cent of total registrations.
The government controversially moved to cut the maximum payment available through the Plug-in Car Grant scheme at the end of March, reducing the grant from £3,000 to £2,500. Ministers said the move, which was accompanied by new rules to ensure the scheme is focused on the most affordable EV models, would allow the scheme to support more motorists in making the switch ahead of the ban of new fossil fuel vehicles by 2030 and hybrid vehicles by 2035. However, EV advocates warned the move could dampen demand for EVs and compared the move unfavourably with recent changes in France and Germany where EV grant payments were increased as part of coronavirus recovery packages.
SMMT chief executive Mike Hawes said that while a full recovery for the beleaguered sector was a “long way off” 2021 still promised to be a record year for electric vehicle sales.
“Market confidence is improving, and we now expect to finish the year in a slightly better position than anticipated in February, largely thanks to the more upbeat business and consumer confidence created by the successful vaccine rollout,” he said. “That confidence should also translate into another record year for electric vehicles, which will likely account for more than one in seven new car registrations.”
Overall, April saw a 30-fold increase in new car registrations compared to the same month last year, when showrooms across the country were closed during the first national lockdown, the SMMT said. However, sales remained 13 per cent lower than the 10-year average, with just new 141,000 new units sold, it added.
The SMMT noted that the full impact of showrooms reopening was yet to be reflected in the sales numbers, due to delays between a customer visiting a dealership, deciding on a model, and then taking delivery of a new vehicle. “After one of the darkest years in automotive history, there is light at the end of the tunnel,” Hawes said. “A full recovery for the sector is still some way off, but with showrooms open and consumers able to test drive the latest, cleanest models, the industry can begin to rebuild.”
The government, meanwhile, heralded the SMMT figures as evidence the UK’s transition away from fossil fuel vehicles was “accelerating at speed”, noting that one in seven cars sold in 2021 so far had a plug, up from one in 30 over the same period in 2019.
Transport Secretary Grant Shapps said April’s sales figures meant that half a million cars on British roads were now ultra low emission. “With news that the half-a-million milestone has now been met, together with the UK now having the second largest EV market in Europe, it’s clear that the shift to green motoring is accelerating at speed,” he said.
In related news, new research from Centrica Business Solutions has revealed that UK firms spent £10.5bn on electric vehicles and on-site charging points during the year to March 2021 and are planning to increase investment by 50 per cent over the next 12 months.
A survey of 200 UK businesses with a turnover of more than £1m found two thirds of companies said they were “well-prepared” to operate a fully electric fleet by 2030, with two fifths of firms revealing they had increased the total number of EVs in their fleet over the past year.
Transport Minister Rachel Maclean said the findings highlighted how EVs would soon come to dominate the auto market. “With British businesses set to increase their investment in electric vehicles by 50 per cent, the message is clear – the future is electric,” she said. “With generous government grants and tax incentives which could save drivers over £2,000 a year, there has never been a better or more exciting time to make the switch.”
Greg McKenna, managing director of Centrica Business Solutions, said the roll out of EV charging infrastructure, a flexible energy system, and sufficient electric vehicles to meet demand were the “three things” the UK needed to meet its 2030 fossil fuel phase out target.
“Despite the disruption of the past year, it is encouraging to see investment in EVs remain a key priority for many businesses,” he said. “The fact that firms are planning to increase their spending so dramatically over the next 12 months is proof that more businesses are recognising the advantages of adopting low-emission vehicles, especially as they recover from coronavirus and seek to create sustainable growth.”
