Fleet registrations soar, but electric vehicles remain stagnant.

The UK’s new car market experienced a modest growth of 1.1% in June, primarily fuelled by a strong demand from fleets, while consumer uptake continued to decline.

According to the Society of Motor Manufacturers and Traders (SMMT), a total of 179,263 new cars were registered last month, pushing the market past the half-million mark for the first time in five years.

This growth was largely driven by fleet and business demand, with fleet registrations increasing by 14.2% to 105,868 units. Larger operators accounted for nearly six out of every ten new cars registered. On the other hand, private retail demand fell for the ninth consecutive month, dropping by 15.3% and accounting for less than 40% of new car registrations.

Year to date, the overall market has seen a 6.0% increase, largely due to a significant 22.3% surge in fleet registrations. Business registrations were slightly down by 0.6%, while private demand experienced a notable 12.0% decline.

Electric vehicle (EV) demand, particularly for battery electric vehicles (BEVs), is significantly driven by fleet registrations. BEV registrations increased by 7.4% in June, reaching their highest monthly share this year at 19.0% of all new vehicle registrations. Plug-in hybrids (PHEVs) also saw a 30.0% increase, capturing a 9.3% market share, while hybrid electric vehicles (HEVs) grew by 27.2% to achieve a 14.9% market share.

However, private consumer uptake of BEVs continues to soften, with a 10.8% decrease year to date. Less than one in five new BEVs go to private buyers, highlighting the reliance of BEVs on the fleet sector. Overall, BEVs now make up 16.6% of the new car market this year, slightly higher than the figure from the previous year.

As the UK heads to the polls, the automotive industry is calling on the next government to provide greater support for consumers in the transition to zero-emission mobility.

Mike Hawes, Chief Executive of SMMT, emphasised the importance of the government’s role in re-energising the market and facilitating a faster, fairer zero-emission transition. He highlighted the need for policies that support the shift towards new electrified powertrains to achieve carbon reduction goals.

In light of the upcoming election, the SMMT is urging the next government to reinstate fiscal incentives for private consumers, such as halving VAT on BEVs for three years and reconsidering Vehicle Excise Duty changes. They are also advocating for fairer public charging costs by reducing VAT and levelling up the UK’s charging network.

Other industry experts, including Deloitte and Transport & Environment, have echoed the need for increased incentives to encourage private consumers to switch to EVs. They stress the importance of accessible public charging infrastructure and government-backed campaigns to promote EV adoption.

Furthermore, Novuna Vehicle Solutions emphasises the importance of establishing clear deadlines for the ban on internal combustion engine (ICE) vehicles to provide businesses with stability and confidence for long-term investment.

As the UK prepares for the election, the future government’s policies on EV infrastructure, consumer incentives, and transition goals will play a crucial role in shaping the automotive industry’s journey towards a sustainable, zero-emission future.