Desperate U.K. Automaker BEV Discounts 'Unsustainable,' SMMT Says

U.K. automakers are slashing battery-electric-vehicle prices in a desperate bid to avoid some of the punitive fines imposed by government regulators for missing sales targets for BEVs.

While a preliminary report by the nation’s auto representative body, the Society of Motor Manufacturers and Traders (SMMT), reveals a consequential jump in BEV take-up by consumers, price cuts come as a severe hit to automakers’ bottom line on vehicles with a much lower profit margin than their internal-combustion-engine siblings.

The SMMT estimates that BEV sales for the last month of 2024 increased about 60% to nearly 44,000 units compared to the same month a year earlier. BEVs accounted for 31% of registrations, their highest monthly share in two years.

However, despite the end-of-year surge, automakers are failing to hit the target of BEVs accounting for 22% of total stock being sold. The SMMT estimates the final figure they will actually achieve is just 18.7% of total sales.

These automakers will face government fines of up to £15,000 ($18,600) per vehicle for failing to comply with the target. Instead, most will divert funds that should be allocated for R&D to buying credits from foreign BEV makers with no manufacturing footprint in the U.K.

In response, the government has promised a review of the targets and hints at building in flexibilities to ease some of the financial pressures on its automakers.

Even so, the target for BEV sales is due to rise to 28% of an automaker’s volume sales, a figure that SMMT's CEO, Mike Hawes, says will be very difficult to meet.

He says continued automaker discounts are unsustainable in view of the fact just one-in-10 private consumers purchased a BEV in 2024 with sales mainly driven by commercial fleets enjoying government tax incentives.

Hawes adds: “Manufacturers are investing at unprecedented levels to bring new zero-emission models to market and spending billions on compelling offers. Such incentives are unsustainable – industry cannot deliver the U.K.’s world-leading ambitions alone. It is right, therefore, that government urgently reviews the market regulation and the support necessary to drive it, given EV registrations need to rise by over a half next year. Ambitious regulation, a bold plan for incentives and accelerated infrastructure rollout are essential for success, else U.K. jobs, investment and decarbonization will be at further risk.”