Automakers to Miss U.K. BEV Targets as Consumers Choose Hybrids

Lackluster growth in U.K. new-car sales in July also mask a potentially greater worry for the nation as the only major European country still committed to banning all internal-combustion-engine vehicle sales in just over a decade.

For while the European Union looks likely to approve the continued sales of ICE powertrain vehicles using carbon-neutral fuels, e-fuels or even hydrogen, the U.K. has, so far, maintained its stance that only new battery-electric and hydrogen fuel-cell-powered vehicles will be allowed on sale from 2035.

This is already proving a problem with latest figures suggesting automakers will miss the government’s conditions to sell 22% of their volume in the U.K. as BEVs. It is now predicted by data from the Society of Motor Manufacturers and Traders (SMMT) that just 18.5% of overall car sales will be BEV by the end of 2024.

That’s because the bulk of BEV sales come from commercial fleets that enjoy substantial financial subsidies to make the switch from ICE-powered vehicles. Retail sales from private vehicle owners, who lack these subsidies, increased by a measly 0.9% and fell by -17.2% as a share of the overall BEV market.

The real danger for the U.K. market is that, should the current trend of slowdown among consumers turning to BEVs become a medium- to long-term trend, new-car sales could fall off a cliff in 2035 unless the government falls in line with the EU’s proposals to leave the door open to further development of clean ICE technology.

Meanwhile, gas-hybrid vehicles outpaced the overall market in July, accounting for 42% of new cars registered in the month. Hybrid-electric vehicle (HEV) uptake increased 31.4% to achieve a 14.5% market share, while plug-in hybrids (PHEV) grew 12.4% to take 8.9% of registrations.

Overall the U.K. new-car market rose just 2.5% with 147,517 new cars reaching the road which, nonetheless, was the best performance for July since 2020, when a re-opening of dealerships following four months of lockdown saw a surge in deliveries to fulfill pent-up demand.

Mike Hawes, SMMT chief executive, says: “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, else the U.K.’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.”