Britain welcomed its one-millionth battery electric vehicle to the roads in January 2024, according to the latest data released by the Society of Motor Manufacturers and Traders (SMMT).
The major milestone since records began in 2002 was reached thanks to 20,935 EVs registered last month, reflecting a 21 per cent year-on-year increase. The BEV market share for the month also grew to 14.7 per cent, though slightly below the 2023 full-year performance of 16.5 per cent. Plug-in hybrids recorded a notable volume growth of 31.1 per cent, capturing 8.4 per cent of the market, while hybrid volumes fell by 1.2 per cent with a 13.1 per cent market share.
Despite the positive trends in the electric vehicle market, challenges persist, primarily in BEV supply volatility. The aftermath of the last-minute resolution over UK-EU rules of origin, which threatened tariffs on EVs, has led to adjustments in product allocation by manufacturers, the SMMT comments. A noteworthy concern is the divergence in demand between fleet and private buyers. While fleet and business demand for BEVs soared by 41.7 per cent in January, registrations by private buyers declined by 25.1 per cent, posing a potential obstacle to the UK's path to achieving net zero.
In response to these challenges, industry leaders are urging the government to provide additional support for private buyers. Ahead of the upcoming Budget, calls are intensifying for a temporary halving of VAT on new BEV purchases. Industry experts argue that such a move, costing the Treasury an average of just £1,125 per car, could have a transformative impact, putting more than a quarter of a million electric cars on the road by the end of 2026.
The proposed VAT reduction aligns with the tax exemptions already in place for other carbon reduction technologies, offering a potential solution to boost consumer adoption, increase the supply of used EVs, attract more charging infrastructure and manufacturing investments, and significantly reduce Britain's carbon footprint. The automotive industry contends that supporting EV consumers today will yield broader and long-lasting benefits for the nation's sustainable future.