SMMT: Electric vehicles will boost the new car market, but the deployment of charging points must accelerate

The UK new car market recorded a third straight month of growth in October, with registrations up by more than a quarter (26.4%) to 134,344 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). Large order fulfillment helped the rebound, although the increase came after a particularly disappointing October 2021, when shipments fell by -24.6%.¹ Year-to-date, the market is down -5.6% year-on-year, but still a third below pre-Covid levels.²

October’s growth was driven mainly by large fleet registrations, which rose 47.4% to 67,911 units, while private buyers rose 7.4% to 62,714. Small businesses recorded growth of 108.6%, although at 3,719 units, it is a small segment of the market.

Zero-emission vehicle deliveries continue to grow in volume, with battery electric vehicle (BEV) registrations up 23.4% to 19,933 and hybrids (PHEV) up 6.2% to 8,899.However, for the first time since the pandemic BEV consumption grew less than the overall market, meaning October was the first month since May 2021 that BEV market share fell year-over-year, primarily due to supply issues.

Hybrid electric vehicle (HEV) deliveries, meanwhile, surged 81.7% to more than one in 10 new cars, as deliveries were prioritized for a number of popular new models. Overall, one in three registrations of electrified vehicles, while more than a fifth (21.5%) were registered with a plug.

Persistent supply chain shortages, rising inflation and rising cost of living have led to a revised downward market forecast of -2.2% for the year, with 1.566 million registrations now expected. Therefore, 2022 will be the most difficult year for the market since 1982.³ On a more positive note, demand for electric vehicles is expected to drive a 21.9% plug-in market share. The overall market recovery is expected to continue through 2023 with a forecast of 1.808 million units and plug-ins, accounting for 26.7% of registrations next year.

This growth highlights the importance of increasing the number of public charging points. At the start of October 2022, there were 34,637 fast and ultra-fast chargers for public electric vehicles in the UK, with 1,239 new fast chargers and 5,023 new standard chargers installed in the first nine months of the year. Of the 249,575 new plug-in registrations over the same period, only one new standard public charger was installed for every 50 new EV plug-in registrations. At this rate, it is unlikely that the government’s ambition of 300,000 public chargers by 2030 will be met.⁴

Mike Hawes, Chief Executive of SMMT, said:

A strong October is very welcome, albeit compared to a weak 2021, but it is still not enough to offset the damage caused by the pandemic and subsequent supply shortages. The forecast for next year shows that a recovery is possible and the growth of electric vehicles looks set to continue, but to meet our overall net zero goals this growth must accelerate and consumers have every reason to invest. That means giving them the financial stability and confidence to make the transition, confident that they can charge – and charge affordably – when they need to. There are models, and more to come; so should public charging stations.

With the infrastructure boom and cost-of-living crisis both likely to undermine future consumption, the government’s autumn statement, scheduled for November 17, offers an opportunity to boost demand and deliver both economic growth and zero progress. Further measures to reduce energy costs in the long term will provide greater certainty for consumers and businesses. Now is not the time to raise costs for motorists, which is likely to lead to inflation and hurt wider government revenue from new car sales. A long-term financial commitment to zero-emission vehicles would go a long way in stimulating investment and demand. Cost and charging anxiety are always the main complaints of EV drivers, so reducing the VAT on public charging to bring it in line with charging at home levels the playing field for drivers who cannot install a charging point at home.