The UK achieved a significant milestone in 2024, securing the top position in Europe’s electric vehicle (EV) market. However, this remarkable success came with the burden of steep manufacturer discounts aimed at boosting sales.
According to recent data from The Society of Motor Manufacturers and Traders Ltd (SMMT), the UK witnessed an impressive sale of approximately 381,970 battery electric vehicles (BEVs) in 2024, marking a striking 21.4% increase from the previous year. This surge is primarily attributed to the tightening of net zero laws in the UK.
Hybrid electric vehicle sales also saw an upward trend, rising by 9.6% to total 261,398 units, and plug-in hybrid vehicle sales increased by 18.3% to reach 167,178 units in 2024. Despite these gains, BEVs represented only 19.6% of the total car market, falling short of the government’s target of 22%.
A crucial factor contributing to the rise in UK EV sales was the significant discounts introduced by manufacturers after the government implemented stricter sales mandates. The zero emission vehicle (ZEV) mandate, which took effect in January 2024, mandated that 22% of all new car sales must be electric, imposing a hefty £15,000 fine for every internal combustion engine (ICE) vehicle sold above a specific threshold. Moreover, this target is projected to escalate to 28% by 2025.
In their efforts to comply with sales targets, several car manufacturers have introduced substantial discounts. Nevertheless, concerns are growing regarding the sustainability of this discounting strategy.
The UK government announced plans to advance its ban on diesel and petrol vehicles to 2030, earlier than the anticipated 2035 date, although certain hybrid vehicles may still be exempt until 2035.
In a notable achievement, the UK narrowly outpaced Germany in electric vehicle sales for 2024, where Germany faced challenges due to subsidy alterations and strategic delays.
Can the UK’s EV Boom Continue?
In 2024, manufacturers expended around £4.5 billion (€5.42 billion) on discounts, averaging nearly £12,000 (€14,455.62) per electric vehicle. Major companies like BMW, Mercedes-Benz, and Ford have expressed concerns that such high discount rates are not viable long-term.
If this trend of deep discounts persists, manufacturers may have to resort to factory closures, layoffs, or cost-cutting measures. Additionally, many companies point out that the surge in EV sales has primarily stemmed from fleet and corporate purchases, while individual consumer demand remains relatively weak.
In October 2024, the SMMT, along with 12 other automotive firms, addressed an open letter to the UK Chancellor, advocating for increased consumer incentives to encourage electric vehicle adoption.
The letter articulated that “Decarbonizing road transport is imperative, hence the need for a zero emission vehicle (ZEV) mandate to drive electric vehicle sales.”
It added, “However, mandates alone do not foster market growth; consumers are more likely to respond positively to incentives. Currently, private consumers lack financial motivation to transition to electric vehicles, which could result in missing critical market targets with far-reaching environmental and economic implications.”
Mike Hawes, CEO of SMMT, emphasized that while the record year for EV registrations showcases manufacturers’ commitment to a sustainable car market, the supporting incentives are unsustainable and call urgently for consumer support to protect investments, jobs, and the collective goal of achieving net-zero emissions.
Photo credit & article inspired by: Euronews
