Good and bad news on EVs as new car market has best year since pandemic

Despite the year-on-year rise, the overall new car market remains well below pre-pandemic levels.

The latest SMMT registration figures show that uptake of pure battery electric new cars reached a record level last year with 315,000 units but their market share dipped.

The new car market has had its best year since 2019 after the number of motors registered in the UK grew by 17.9 per cent.

Some 1.9 million cars were registered in 2023, according to data from the Society of Motor Manufacturers and Traders (SMMT). Mike Hawes, chief executive of the SMMT, described the increase as “a very positive result”, particularly considering the “relatively negative economic backdrop”. Despite the year-on-year rise, the overall new car market was 17.7 per cent below pre-pandemic levels.

Last year’s gains were driven by businesses investing in large fleets (up 38.7 per cent year-on-year), with demand from private buyers remaining stable at around 818,000 units. Hawes said the lack of growth in private registrations was “no surprise” amid increases in the cost of living and interest rates.

Uptake of battery electric new cars reached a record level last year with 315,000 units but their market share eased from 16.6 per cent during the previous 12 months to 16.5 per cent. Volumes actually fell by 34.2 per cent in the last month of 2023, but the SMMT attributed this to an “abnormal” December 2022 when many orders were fulfilled.

The SMMT called on the UK government to halve VAT to 10 per cent on new electric car purchases by private buyers for three years. Such a move would stimulate demand by reducing price tags by around £4,000 on average, the organisation stated. The SMMT is also forecasting that the number of new cars registered in the UK in 2024 will reach 1.97 million.

Levent Ergin, sustainability strategist at Informatica, said: “The yearly picture for registrations of new battery electric vehicles [BEVs] was muted, with market share stalling. 2024 will now be pivotal for the automotive industry and all eyes will be on whether BEV adoption rates remain stable. The recent agreement with the EU to postpone the imposition of 10 per cent tariffs on EVs will likely have a positive impact as we head into the new year - and we could see this translate into an increase in EV registrations over the coming months.”