Expected demand for new electric cars downgraded

The proportion of new cars expected to be pure electric this year has been downgraded due to weakening demand from private buyers.

A new forecast issued by the Society of Motor Manufacturers and Traders (SMMT) estimates that pure electrics will take an 18.5% market share in 2024.

In April the figure was expected to be 19.8%.

The overall outlook for how many new cars will be registered this year has also fallen, from around 1,984,000 to 1,968,000.

In July the sector recorded its 24th consecutive month of year-on-year growth.

Some 147,517 new cars were registered last month, up 2.5% from July 2023.

The increase was sustained entirely by purchases for fleets owned or leased by businesses or other organisations (up 13.0%).

Uptake from private buyers continued to diminish, down 11.1%.

SMMT chief executive Mike Hawes said: “Two years of new car market growth against a backdrop of a turbulent economy is testament to the sector’s resilience and the attractiveness of the deals on offer.

“Weakening private retail demand, however, particularly for EVs and despite generous manufacturer discounts, is the overriding concern.

“More people than ever are buying and driving EVs but we still need the pace of change to quicken, (or) else the UK’s climate change ambitions are threatened and manufacturers’ ability to hit regulated EV targets are at risk.

“Achieving market transition at the pace demanded requires greater support for consumers and, with the all-important new numberplate month of September beckoning, action on incentives and infrastructure is needed now.”

Under the zero emission vehicle mandate, at least 22% of new cars and 10% of new vans sold by each manufacturer in the UK this year are required to be zero emission, which in most cases means pure electric.

The threshold will rise annually.

Manufacturers risk being required to pay the Government £15,000 per polluting vehicle sold above the limits.

But businesses are not expected to face fines this year because they will be able to use flexibilities such as purchasing credits from rival companies.

Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said: “Overall, July marked another lacklustre month for the new car market, as the strong performance in fleet channels struggled to offset the ongoing retail decline.

“The bright spot is a strong consumer move to low-emission cars, which so far this year have accounted for almost half of all new car sales, up from around just one in 10 in 2019.

“Manufacturers are also working hard to tempt buyers with enticing offers, as shown by a 20% rise in new car advert views on our platform in July.

“That offers some optimism as we approach the key plate change month of September.”