Declining Demand: Proportion of Pure Electric Cars Decreases

Expectations for the market share of pure electric vehicles for 2024 have been lowered due to weaker demand from private customers. According to a new forecast from the Society of Motor Manufacturers and Traders (SMMT), the share of pure electric cars next year is expected to be 18.5 percent. In April, the expectation was 19.8 percent. The number of newly registered vehicles for this year has also been revised downward, from approximately 1,984,000 to 1,968,000 units. The sector recorded year-over-year growth for the 24th consecutive month in July, with 147,517 new cars registered – an increase of 2.5 percent compared to July 2023. The growth stems exclusively from fleet purchases, which are rented or leased by companies or organizations, with an increase of 13.0 percent. In contrast, demand from private buyers continued to decline, falling by 11.1 percent. Mike Hawes, CEO of the SMMT, sees this as a double-edged sword: "Two years of growth in the new car market despite economic turbulence testifies to the resilience of the sector and the attractiveness of the deals offered. However, weaker demand in the private customer segment, especially for electric vehicles and despite generous manufacturer discounts, is the main problem." Under the Zero Emission Vehicle Mandate, manufacturers in the UK are required this year to ensure that at least 22 percent of new cars and 10 percent of new vans are emission-free, which generally means pure electric vehicles. These thresholds increase annually. If manufacturers do not meet the quotas, they face fines of £15,000 per excess vehicle. However, it is not expected that companies will have to pay fines this year, as they can, among other things, acquire credits from competitors. Ian Plummer, Commercial Director at Auto Trader, observes a positive trend in the consumer market: "Overall, July was once again a mixed month for the new car market, as strong performance in fleet channels could not offset the ongoing decline in retail. A bright spot is the strong consumer trend towards low-emission vehicles, which so far account for almost half of all new car sales this year, compared to about one in ten in 2019. Manufacturers are also striving to attract buyers with attractive offers, evidenced by a 20 percent increase in new car listing views on our platform in July. This provides some optimism as the important month of September approaches.