By Paul Homewood
EV sales crept up to 18.7% YTD, despite a rise in November, driven largely by unsustainable discounting, according to SMMT:
https://www.smmt.co.uk/2024/12/discounts-drive-ev-growth-amid-wider-market-contraction/
There is little prospect that EVs will get anywhere next year’s ZEV Mandate of 28%.
SMMT write:
Deliveries of new cars fell by -1.9% in the UK during November with 153,610 joining the road, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). It is the second consecutive monthly decline, and the third decline in four months,1 as the market contracts amid the race to meet tough EV market share targets.
Demand from private buyers, among whom uptake has waned for two years, dropped by -3.3% to 58,496 units, accounting for fewer than four in 10 (38.1%) new registrations. Fleet purchases, which represent the bulk (59.9%) of the market, fell by -1.1% to 91,993 units, while low-volume business demand rose by 5.2% to 3,121 units.
Manufacturers are committed to the mandate’s ambition, but market demand for EVs remains weak and below the levels expected when the regulation was drawn up by the previous government. The industry now expects the UK’s BEV market share to be 18.7% in 2024, although a strong December performance could raise that to 19% – still, however, short of the 22% mandated target for the year.
This year’s growth cements Britain as Europe’s second biggest new BEV market by volume and closing the gap on leader Germany. It reflects long-term manufacturer investment in new models, with more than 130 zero emission choices now available – up more than 42% on a year ago4 – on which the sector is offering record discounts. While this is providing some success, the scale of discounting, worth some £4 billion across 2024, is unsustainable and poses a risk to future consumer choice and UK economic growth.5 With the right, responsive market regulation, however, the UK could hold a commanding position as an exemplar global market for a rapid zero emission transition.
https://www.smmt.co.uk/2024/12/discounts-drive-ev-growth-amid-wider-market-contraction/
The SMMT still have their head in the sand, maintaining that more subsidies from government will solve the problem.
As well as the £4 billion hit on discounting, which equates to £12000 per car, the motor industry is also suffering from the reduction in ICE cars forced on them by the mandates, which is evidenced by the drop in private sales, which have fallen by 71K on YTD:
As we know, EV sales to private buyers are rock bottom, so that reduction is the main reason why petrol/diesel sales have fallen this year.
Market share of EVs is up 2.4% year-on-year, so at this rate they might reach 21% next year, as long as discounting is continued. But the target of 28% is pie in the sky.
At the end of November, EV registrations were 60,000 short of target. At £15000 a go, this will potentially cost the industry £900 million.
Carmakers can carry forward shortfalls, but that would be a mug’s game. If they cannot hit this year’s target, they certainly won’t hit next year’s. There are other minor exemptions too, but these will make little difference.
And they can buy surplus allowances from other manufacturers. But remember that 60,000 is the net shortage. If there are, say, 20,000 surplus allowances available in the market, there will be a gross shortage of 80,000 amongst the rest.