-
New car market records
sixth consecutive month of growth with January registrations
rising 14.7% as 131,994 new cars reach the road.
- Plug-in vehicles continue growth but chargepoint rollout
fails to keep pace, challenging consumer confidence.
- Latest outlook anticipates 11.1% market uplift in 2023 to
reach 1.79m units despite straitened economy and strained supply
chains.
- Delivery of green goals in danger of delay without
chargepoint mandates and action on VAT and VED.
The UK new car market grew 14.7% in January to reach 131,994
units, according to the latest figures from the Society of Motor
Manufacturers and Traders (SMMT), setting the tone for an
anticipated countercyclical year of growth. This was the best
start to the year since January 2020’s pre-Covid 149,279 units
and marks the sixth successive month of expansion.
Electrified vehicles notably drove the increase, as manufacturers
continue to bring ever more choice to the market despite ongoing
strains on the supply chains. Hybrid electric vehicles (HEVs)
comprised 14.4% of new car registrations, increasing volumes by
40.6%. Meanwhile, battery electric vehicle (BEV) registrations
rose 19.8% to reach 17,294 units, or 13.1% of new registrations –
slightly below the average recorded for 2022.1 Plug-in
hybrid vehicles (PHEVs) recorded a 0.7% rise, although their
share fell to 6.9% of new cars reaching the road.2 As
a result, one in five new cars registered in the month came with
a plug.
It was also a strong month for large fleet registrations, which
increased by 36.8% to 69,540 units, while registrations by
private buyers fell by -4.3% to 59,639 units – reflecting some
easing of supply and evidence of how shortages last year
distorted market performance. Registrations by businesses, the
smallest segment at 2,815 units, rose by 45.6%.
Plug-ins are anticipated to comprise of more than one in four new
registrations this year, representing growth of 32.1% or
approximately 487,140 units, and almost a third (31.0%) of the
market in 2024 at 607,150 units.3 However, the rollout
of infrastructure needed to charge them is failing to keep pace.
During Q4 2022, the ratio of new chargepoint installations to new
plug-in car registrations dropped to one for every 62 – a
significant fall compared with the same quarter last year, when
the ratio was 1:42.4 As a result, in 2022, one
standard public charger was installed for every 53 new plug-in
cars registered, the weakest ratio since 2020.5
Mandating rollout targets for infrastructure and regulating
service standards would give drivers certainty they can always
find a working, available charger. Infrastructure must be built
ahead of demand else poor provision risks delaying the electric
transition.
More immediately, the upcoming Budget is an opportunity to
implement measures that support the transition. Reducing VAT on
public chargepoint use from 20% to 5% in line with home charging
would ensure more affordable access for all and underpin a fair
net zero transition. Government should also review proposals to
graft a Vehicle Excise Duty regime designed for fossil fuel cars
onto zero emission vehicles (ZEVs). The higher production costs
associated with electric vehicles means that currently more than
half of all available BEVs would be subject to the expensive car
supplement due to apply to ZEVs from 2025.6 While it
is right that all drivers pay their fair share, existing plans
would unfairly penalise those making the switch, and risk
disincentivising the market at the time when EV uptake should be
encouraged. Government should also tackle other fiscal blocks to
uptake by raising recommended business mileage rates.
Mike Hawes, SMMT Chief Executive, said, “The
automotive industry is already delivering growth that bucks the
national trend and is poised, with the right framework, to
accelerate the decarbonisation of the UK economy. The industry
and market are in transition, but fragile due to a challenging
economic outlook, rising living costs and consumer anxiety over
new technology. We look to a Budget that will reaffirm the
commitment to net zero and provide measures that drive green
growth for the sector and the nation.”
The strong start to the year is mirrored in the latest market
outlook, which anticipates 1.79 million new car registrations in
2023, an 11.1% increase on the past year but still well below
2019 levels. This also represents a -0.8% reduction on October’s
outlook, against a weak economic backdrop. However, a further
9.3% increase is expected next year, with 1.96 million new cars
expected to join the road in 2024.
Notes to editors
1 BEV market share in 2022: 16.6%
2 PHEV market share in January 2022: 7.9%
3 SMMT market outlook, published January 2023
4 Based on SMMT analysis of plug-in car registrations and DfT EV
chargepoint figures
5 2020 ratio – 1:54
6 Based on SMMT analysis of available BEV models and base vehicle
prices
