EVs account for one in four new car registrations in flat February market

The UK new car market fell slightly in February, down -1.0% to 84,054 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). 

In what is usually the smallest month of the year (accounting for only around 4% of annual volumes), February was the fifth consecutive month of decline, with a -4.0% reduction in fleet registrations – which have driven previous market growth. Private registrations rose by 4.6% to slightly increase overall market share to 35.6%, while the much smaller business sector rose by 3.3%.

Electrified vehicle uptake continued to grow, with plug-in hybrid vehicles (PHEVs) rising 19.3% and hybrid electric vehicles (HEVs) up 7.9%. Battery electric vehicle (BEV) registrations were up by 41.7% to 21,244 units, securing a 25.3% market share compared with 17.7% a year ago. This dramatic increase compared with the rest of the market was unsurprising considering the forthcoming tax changes in April, which will see many EV models subject to the vehicle excise duty expensive car supplement (ECS) for the first time. This maintains the positive trajectory but still falls short of the 28% target for 2025 and, given February comes ahead of the March numberplate change, it is always one of the smallest and most volatile months.

Next month is likely to see a further surge in EV uptake, as buyers capitalise on the new ’25 plate and take their last chance to avoid the punitive ECS which, from 1 April will add £2,125 over six years to the cost of BEVs with a list price above £40,000.¹ Relative to the rest of the market, BEVs are disproportionately affected as higher production costs meaning the average BEV retails above the ECS threshold, a threshold which remains unchanged since its introduction in 2017.² The introduction of this measure also risks disincentivising the used market as well as the new, impeding a faster, fairer transition. 

Manufacturers have already underwritten the transition to the tune of more than £4.5 billion in discounts over the last year alone – on top of the billions invested in developing and bringing the vehicles to market. Such industry support is unsustainable which is why the current ZEV Mandate must arrive at measures which afford greater market flexibilities, incentivise private purchases, and both encourage and facilitate a faster rollout of charging infrastructure.

Mike Hawes, SMMT Chief Executive, said, “Although February’s figures show a subdued overall market, the good news is that electric car uptake is increasing, albeit at huge cost to manufacturers in terms of market support. It is always dangerous, however, to draw conclusions from a single month, especially one as small and volatile as February. With the all-important March number plate change now upon us, and tax changes taking effect in April that will, perversely, dissuade EV purchases, we expect significant demand for these new products next month – but, long term, EV consumers need carrots, not ever more sticks.”

Notes

¹ BEVs are currently exempt from all VED. From 1 April, all BEVs will be subject to £10 VED in the first year of ownership, followed by annual VED of £195, currently, in years 2-6 (£975), for a total of £985. For BEVs more than £40,000, an additional £425 is currently charged annually in years 2-6 (£2,125) on top of standard VED, to give a total of £3,110.
² JATO sales weighted average BEV list price 2024: £48,600