New Van Market Declines Again as eLCV Demand Soars

Welcome, Net Zero News readers,

In an intriguing turn of events, the UK’s new van market has experienced a notable contraction in August, with registrations plummeting by 13.3%. Despite this overall decline, the demand for electric vans – specifically battery electric vans (BEVs) – has surged impressively, marking a defining moment in the marketplace.

According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), a total of 14,365 new vans, pickups, and 4x4s graced the UK roads last month. This figure represents a decline from 16,575 vehicles registered in August 2024, signalling a continuing trend of reduced sales in what is typically a quieter month ahead of the ‘new plate’ September.

Unfortunately, this drop isn’t merely a seasonal blip. The van market has faced a steady decline every month this year, influenced by a challenging economic climate and waning business confidence. The statistics reveal that all segments of the van market recorded declines in August. Registrations for the largest vans fell by 11.5%, totalling 10,398 units. Despite this downturn, these larger vans still account for a substantial 72.4% of the overall market share. Medium-sized vans also faced setbacks, with registrations decreasing by 14.0%, resulting in just 2,383 units on the road.

Furthermore, the new pickups segment has seen the most significant percentage drop, plummeting by 25.8% to just 1,040 units. This decline can be largely attributed to recent fiscal changes that have reclassified double-cab pickups as cars for Benefit-in-Kind and capital allowance purposes since April. Meanwhile, the smaller van and 4×4 segments, which traditionally represent a smaller portion of the market, also experienced declines, with drops of 17.6% and 13.9% respectively, leading to registrations of 352 and 192 units.

However, amidst these discouraging figures, the rise in demand for battery electric vans (BEVs) is nothing short of extraordinary. BEVs saw a staggering increase of 109.5%, with 1,902 units registered in August alone. This surge translates into a record market share of 13.0% for electric vans, signalling a significant shift in consumer preferences toward more sustainable transportation options.

Year-to-date statistics reveal that while the overall van market has contracted by 11.4%, the uptake of new BEVs has soared by an impressive 59.9%. Currently, electric vans account for 9.1% of the overall market. Despite this growth, it is important to note that this figure remains below the mandated target of 16%, underscoring the urgent need to bolster market confidence and accessibility to electric vehicles.

The SMMT has emphasised that operator confidence will be pivotal as we approach September, the second-busiest month for the new van market. This month could serve as a barometer for the industry’s recovery and overall health. To facilitate a smooth transition to electric vehicles, the extension of the Plug-in Van Grant and the implementation of the Depot Charging Scheme are critical. These initiatives aim to support operators in making the switch to electric, ensuring that all new buyers have access to adequate van-suitable charging infrastructure, particularly in public and on-street locations.

Moreover, depots that may face grid connection delays of up to 15 years must be prioritised in planning, much like data centres and wind farms. Such prioritisation is essential for ensuring timely road decarbonisation and meeting the UK’s climate goals.

Mike Hawes, the chief executive of SMMT, articulated the challenges faced by the industry, stating, “August is conventionally a low-volume month for the new LCV market, so while the continued decline is disappointing, the focus is on September to deliver the fleet investment and growth that would reflect a healthy business environment.”

He further emphasised the importance of a thriving market for decarbonisation efforts, noting, “A thriving market is also essential for decarbonisation, given the vast choice of electric van models already available to suit almost every need. Manufacturers need greater volumes to ensure investment in innovation continues unabated.”

As we look ahead, it is clear that while the van market faces immediate challenges, the upward trajectory of electric van demand offers a glimmer of hope. The momentum for battery electric vans is building, and with the right support and infrastructure in place, there is potential for a robust future that aligns with our net-zero ambitions.

Stay tuned as we continue to monitor the developments in the van market and the strides towards a more sustainable transportation landscape in the UK. The journey to net zero is a collective effort, and every step towards electrification is a step towards a greener future.