Electric vehicle demand continues to falter and just one in four new battery cars are purchased by private buyers, according to latest industry data.
The number of car registrations across all fuel types grew 14.3 per cent and saw the most motors sold in an October for five years, new Society of Motor Manufacturers and Traders (SMMT) data shows.
However, appetite for EVs is dwindling and it means manufacturers are now at real risk of missing costly targets requiring them to increase their zero-emission car sales from January.
The automotive trade body has reacted by calling on the Chancellor to ‘introduce incentives and facilitate infrastructure investment’ in the upcoming Autumn Statement in a bid to boost EV uptake.
![EV demand falters again in October: Electric vehicles made up just 15.6% of all new car sales last month. From next year, manufacturers need to up EVs registrations to 22% in order to avoid massive fines imposed by the UK Government](https://topnews.media/wp-content/uploads/2023/11/77454815-12715035-EV_demand_falters_again_in_October_Electric_vehicles_made_up_jus-a-1_1699272624275.jpg)
EV demand falters again in October: Electric vehicles made up just 15.6% of all new car sales last month. From next year, manufacturers need to up EVs registrations to 22% in order to avoid massive fines imposed by the UK Government
A total of 153,529 car registrations in October was 7.2 per cent above pre-pandemic levels and the best performance in the month since 2018.
However, the statistics reveal that EV uptake isn’t accelerating as fast as manufacturers need it to in order to avoid costly penalties levied from 2024.
The data shows that EV uptake did grow for a 42nd consecutive month in October, rising 20.1 per cent year-on-year with 23,943 registrations in total.
Yet, private registrations accounted for fewer than one in four EVs bought, with large fleets fuelling the majority of sales in a stark indication that consumer demand is waning.
![A total of 153,529 car registrations in October was 7.2 per cent above pre-pandemic levels and the best performance in the month since 2018](https://topnews.media/wp-content/uploads/2023/11/77454823-12715035-image-a-19_1699271629410.jpg)
A total of 153,529 car registrations in October was 7.2 per cent above pre-pandemic levels and the best performance in the month since 2018
![While EV (BEV seen in the table) sales grew year-on year in October, they are well short of the ZEV mandate's requirement from 1 January](https://topnews.media/wp-content/uploads/2023/11/77454821-12715035-While_EV_BEV_seen_in_the_table_sales_grew_year_on_year-m-22_1699271878055.jpg)
While EV (BEV seen in the table) sales grew year-on year in October, they are well short of the ZEV mandate’s requirement from 1 January
The volume of registrations last month means EVs made up only 15.6 per cent of all car sales, which is a long way short of the 22 per cent required of manufacturers from next year when the Zero Emission Vehicle (ZEV) mandate is introduced.
The annually-increasing thresholds of the mandate was rubberstamped in September, just days after the Government confirmed had delayed the ban sales of new petrol and diesel cars by five years from 2030 to 2035 – a move experts say has played a significant part in stalling electric car demand in recent weeks.
Mainstream car makers that fail to meet the ZEV’s increasing sale targets from next year face substantial penalties or will be forced to purchase EV credits from other brands, such as Tesla and Polestar that only sell battery cars.
Fines amount to £15,000 for every car short of the binding targets. For vans, manufacturers will have to pay £9,000 per vehicle next year, before the van payment increases to £18,000 for the rest of the regulation’s timeframe.
![Electric future: These are the annually-increasing binding sales targets set out under the ZEV mandate showing the percentage of total sales that need to be EVs in order for makers to avoid fines](https://topnews.media/wp-content/uploads/2023/11/56482661-12715035-Electric_future_These_are_the_annually_increasing_binding_sales_-a-2_1699272624276.jpg)
Electric future: These are the annually-increasing binding sales targets set out under the ZEV mandate showing the percentage of total sales that need to be EVs in order for makers to avoid fines
Mike Hawes, the SMMT’s chief executive, believes EV sales success now hinge on the Government to bolster the number of available public charging points, cut taxation on charging and introduce new schemes to encourage motorists to make the switch now.
He said: ‘The Autumn Statement is a key opportunity for government to introduce incentives and facilitate infrastructure investment.
‘Doing so would send a clear signal of support for drivers, reassuring them that now is the time to switch to electric.’
Such has been the slowdown in EV demand in recent months that the SMMT has been forced to revise its market forecasts for this year and next.
Overall new car registrations are anticipated to reach 1.89million by the end of the year – a rise of 2.1 per cent on July’s expectations – however, expectations for EV uptake have been downgraded by 1.7 per cent to 324,000 units resulting in an expected market share at year end of 17.2 per cent.
For 2024, EV market share outlook has been revised down slightly to an optimistic 22.3 per cent.
Ian Plummer, commercial director at Auto Trader, said car makers are already reacting by offering big discounts on their EV models, both for cash purchases and finance.
However, post-Brexit ‘rule of origin’ trade tariffs are due to come into force next year that are expected to increase the price of electric cars by an average of £3,600, these discounts might not last long.
Rule of origin tariffs of 10 per cent are due to be imposed on exports of electric cars between the UK and EU from January 1 if at least 45 per cent of their value does not originate in the UK or EU.
With expensive batteries that make up the majority of an EV’s value predominantly sourced from other markets – namely China – it will be impossible for EV makers to avoid these tariffs. And the likelihood is the increase in cost will be absorbed by motorists.
![New 'rule of origin' post-Brexit trade tariffs are due to be imposed on EVs from 1 January and will push up their price by £3,600 on average, the SMMT has warned](https://topnews.media/wp-content/uploads/2023/11/77454817-12715035-New_rule_of_origin_post_Brexit_trade_tariffs_are_due_to_be_impos-a-3_1699272624278.jpg)
New ‘rule of origin’ post-Brexit trade tariffs are due to be imposed on EVs from 1 January and will push up their price by £3,600 on average, the SMMT has warned
‘With ever-growing ZEV mandate requirements looming, manufacturers will be using every tool they can to increase new electric sales – currently, our research shows over two thirds of new electric cars are enjoying some kind of offer,’ Mr Plummer said.
‘By combining discounts and finance offers on the table, new electric car monthly payments are getting ever closer to petrol and diesel.
‘This, paired with the potential £153 saving per 1,000 miles when fuelling an electric car, mean that right now it’s a great time to consider going electric and so, if calls for delays to the rules of origin requirements are heeded, we can hope to see some significant growth in private new electric car sales over the coming months.’
Richard Peberdy, head of automotive at KPMG, described the rule of origin tariffs as ‘another cloud closing in on the horizon,’ adding: ‘Higher costs would threaten market competitiveness at a time when lower pricing is key to increasing EV adoption, whilst also being key to the UK meeting the 22 per cent target set for 2024 by the ZEV mandate.’
Fleet operators have also warned that the impact of rule of origin tariffs could also impact demand in their sector, which would be a major blow to registrations and the Government’s green targets.
Jon Lawes, managing director at Novuna Vehicle Solutions, said: ‘With the UK Government and European Commission remaining at loggerheads over whether to delay or revise the planned taxes on EVs due to hit the automotive sector from January 1, the industry faces a difficult few months.
‘The rules of origin mandate will make it almost impossible for most vehicle manufacturers in the EU to avoid the tariffs.
‘The clock’s ticking and we need urgent clarity on whether there will be any flexibility on this deadline, to avoid eroding confidence in the EV market.’
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.