The UK new automobile market has recorded its greatest February efficiency for twenty years as registrations rose 14.0% to 84,886 items, in response to the most recent figures from the Society of Motor Producers and Merchants.¹

It was the nineteenth month of consecutive development, which has primarily been pushed by fleets investing within the newest automobiles. Certainly, fleets and companies had been accountable for everything of February’s improve, with registrations up 25.2% and 15.5% respectively. Non-public uptake continued to battle, with a -2.6% decline to report a 33.7% market share. February is historically unstable because the lowest quantity month of the yr, with consumers usually electing to attend till March and the brand new quantity plate.

Electrified automobiles recorded strong development, with hybrid electrical automobiles (HEVs) rising 12.1%, however taking a touch smaller year-on-year market share of 12.7%. Plug-in hybrids (PHEVs) recorded the most important proportional development for the month, rising 29.1% to succeed in 7.2% of the market. Battery electrical automobile uptake equally outpaced the remainder of the market, rising 21.8% to account for 17.7% of registrations, an enchancment on final yr’s 16.5%.

Whereas February’s development is optimistic and demonstrative of ongoing strong demand for the most recent automobiles, the long-term image will grow to be clearer in March, the busiest market month. Whereas BEV market share and volumes proceed to develop throughout the first yr of mandated targets for producers, the rise in uptake is solely sustained by fleets, thanks to forcing fiscal incentives. Non-public consumers account for fewer than one in 5 (18.2%) new BEVs registered in 2024 to date.

A quicker, fairer market transition is determined by extra non-public consumers switching however the lack of serious incentives is holding again many. Tomorrow’s Finances is a chance for the Chancellor to stimulate demand by halving VAT on new EVs for 3 years, amending proposed Car Excise Responsibility (VED) adjustments, and decreasing VAT on public charging in keeping with residence charging.

Whereas customers don’t pay VAT on different emission discount applied sciences similar to warmth pumps and photo voltaic panels, non-public EV consumers pay the complete 20% levied on all vehicles, whether or not they be electrical, petrol or diesel. Halving VAT on new EV purchases would save the typical purchaser round £4,000 off the upfront buy worth – but price the Treasury lower than the Plug-in Automotive Grant that was scrapped in 2022.²

Equally, upcoming adjustments to Car Excise Responsibility subsequent yr would see nearly all of BEV consumers successfully penalised £1,950 for going electrical because of the ‘costly automobile’ complement.³ Moreover, these unable to cost a BEV at residence presently pay a ‘pavement penalty’ of 20% VAT on public charging – quadruple the speed paid by these with the chance to cost at residence.

Mike Hawes, SMMT Chief Govt, stated:

The brand new automobile market’s potential to ship development continues with its greatest February for 20 years and this week’s Finances is a chance to make sure that development is greener. Tackling the triple tax barrier because the market embarks on its busiest month of the yr would increase EV demand, slicing carbon emissions and energising the economic system. It can ship a quicker and fairer zero emission transition, placing Britain’s EV ambition again within the quick lane.

1 February 2004 registrations: 91,460
2 Primarily based on SMMT evaluation and a mean JATO BEV buy worth of £47,471 (1H 2023)
3 BEV exemption from Car Excise Responsibility Costly Automotive Complement (utilized to automobiles with listing worth of or exceeding £40,000) ends in 1 April 2025. Complement price is presently £390pa on high of normal VED price, payable from second to sixth yr inclusive after first automobile registration

SOURCE: SMMT