Comment on SMMT new car sales data for October

 “With EVs once again accounting for more than 1 in 5 new cars sold in the UK, the notion that demand for them is waning continues to ring hollow.

“Market share for the whole of 2024 so far is now 18.1% - meeting the 18.1% figure the industry as a whole needs to hit in 2024 to comply with the Government’s ZEV mandate, rather than the headline figure of 22% that’s often quoted.

“The mandate is continuing to work as planned, driving down prices as manufacturers compete to hit their sales targets. This ‘war for motorists’ is clearly helping more and more people make the move away from paying the petrol premium that comes from owning and driving an internal combustion engine car.

“Increasing numbers of lower rate tax payers, health and social care workers in particular, are choosing to use salary sacrifice schemes to lease a new EV rather than buying one privately, potentially saving thousands in the process. And in three or so years, these new EVs will hit the second-hand market, helping millions more households access the benefits that come from cheaper and cleaner electric driving.

“Slowing the transition to EVs is bad for manufacturing as recent analysis has shown, with hundreds of thousands of jobs and billions of pounds of economic value at risk if Government and industry don’t manage to sustain a swift shift to electrification”.

The ZEV Mandate’s headline EV sales target for 2024 is 22%, but this is not the target that the car industry needs to hit to be compliant with the regulation. The production of comparatively large numbers of low CO2 emitting petrol and diesel cars generates credits that can be transferred to the ZEV mandate – with the effect of lowering the percentage target that manufacturers have to hit. New Automotive has calculated that this means the sales target that the whole industry needs to hit for 2024 is 18.1%, not 22%. [2]

The BVRLA recently revealed 52% of salary sacrifice drivers are basic-rate tax payers and over 50% are female. They are spread throughout the UK, with over 50% of them working in the health and social work sector. [3]

A recent report by CBI Economics, commissioned by the ECIU, set out the consequences for the UK’s car industry should it go slow in making the transition to manufacturing EVs. [4] The contributions made by the sector to the UK economy could fall by as much as 73%, or £34.1bn, and over 400,000 jobs could be lost should EV production levels stagnate. Government support is critical in avoiding such an outcome, and this includes the provision of a stable and supportive regulatory environment through keeping measures like the ZEV Mandate in place.