UK new car registrations grew for the first time since August 2020, according to new data from the Society of Motor Manufacturers and Traders (SMMT).

The latest figures showed the shift to new technologies is continuing, with plug-in vehicle demand reaching its highest ever volume. Battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) took a combined market share of 13.9%, up from 7.3% last year as the number of models available to customers increased from 72 to 116.

Across the market, 29,280 more units were registered during March – a rise of 11.5% – compared to the same month last year. The month represents a year since the first lockdown in March 2020, which saw registrations fall by 44.4%.

In February, the UK new car market declined by 35.5% as 28,282 fewer units were registered.

Registrations of BEVs increased by 88.2% to 22,003 units, while PHEVs rose by 152.2% to 17,330. Hybrid electric vehicles (HEVs) also rose 42.0% to reach 21,599 registrations.

BEV and PHEV electric cars together accounted for more than one in 10 registrations in 2020 – up from around one in 30 in 2019, amid a turbulent year for the new car market.

The number of EVs on UK roads is expected to exceed that of diesel-powered models by 2030, according to research by The AA.

Compared with the 2010-2019 March average of 450,189, registrations were down -36.9%, with 283,964 units registered. So far, 2021 has seen 58,032 fewer cars registered compared to January to March last year, equivalent to a loss of £1.8 billion in turnover during the first quarter based on the JATO estimated average new car price of £30,729.

With showrooms ready to open next week on April 12, the SMMT said for the sector to return to its pre-pandemic levels, around 8,300 new cars will need to be registered every day for the rest of the year.

By comparison, the industry has averaged around 7,400 a day during the past decade and current levels are closer to 5,600 a day.

While overall registrations were slightly up compared to last year, growth came almost entirely from fleets, which saw a 28.7% increase in registrations. Retail consumer demand remained depressed, falling by -4.1% compared to March 2020 as showrooms remained closed for the duration of the month.

Mike Hawes, SMMT’s chief executive, said: “The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard. However, with showrooms opening in less than a week, there is optimism that consumer confidence – and hence the market – will return.

“We know we will see record breaking growth next month given April 2020 was a washout, but a strong, sustainable market is possible if customers respond to the choice and competitive offers the industry provides within the safest of showroom environments.

“New plug-in models are already helping drive a recovery but to convince more retail consumers to make the switch, they must be assured these new technologies will be convenient for their driving needs and that means, above all, that the charging infrastructure is there where they need it, and when they need it.”

Following the post-Brexit trade deal, the SMMT said the UK must secure investment in battery gigafactories “at pace”.

The Government recently announced a £30 million investment to help support research into battery technology, the electric vehicle (EV) supply chain and hydrogen vehicles.

The funding comes ahead of the phasing out of the sale of new petrol and diesel cars by 2030, as pledged in the Government’s Ten Point Plan.

Read more: SMART TRANSPORT

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CAR TAX changes introduced last year have made owning electric cars “significantly cheaper” than petrol or diesel models, according to Octopus Electric Vehicles CEO Fiona Howarth.

Ms Howarth says updates to benefit in kind rates on electric company cars has allowed employees to save up to 40 percent on their monthly car costs. The massive savings has led to a surge in demand for vehicles with interest having “never been higher”.

She said enquiries over salary sacrifice car tax schemes have increased “sevenfold” in the last year as drivers are desperate to secure cheap electric cars.

Benefit in kind rates were completely scrapped for electric vehicles in April 2020, dropping from 16 percent to zero.

Ms Howarth said: “Salary sacrifice makes electric cars a no brainer – making them significantly cheaper than their petrol or diesel counterparts.

“And with incredibly low company car tax rates on EVs, demand has never been higher.

“Almost a third of employees want the option of an EV as a company car and our own enquiries from businesses have risen seven-fold in the last year alone.

“The government has made this possible with incredibly low company car tax rates on EVs, giving businesses an opportunity to offer their team a hugely valuable benefit, whilst also doing something great for the planet.

“Employees are delighted to see how they can save 30-40 percent every month on their car costs, by saving on income tax and national insurance.”

Her comments come just a day after benefit in kind rates were increased for electric vehicles.

Costs rose from zero to one percent for fully-electric models in an increase which could cost some drivers over £100 per year.

But rates were still lower than many petrol and diesel cars which are now paying over 30 percent in benefit in kind charges.

Ms Howarth has previously warned the increase was a “negligible” rise and predicted demand levels would not slow down despite the extra charges.

She added: “Salary sacrifice is essentially a zero-cost, zero-effort tool for businesses to fight climate change and save the planet.

“If just 10 percent of UK employees switched to electric – we could decimate CO2 emissions of cars, while collectively saving almost £4bn per year.

To help boost the takeup of fully-electric models, Octopus Electric Vehicles have launched a new Electric Dreams service.

The new programme will support the growing number of employees looking to access salary sacrifice schemes across the UK.

They said the new scheme will give employees access to every electric vehicle on the market today with a range of over 100.

They said an extra 20 cars will be added to the scheme later in 2021 to ensure vehicles are available for every type of road users.

James McMaster, CEO of fitness firm Huel, who have signed up to Octopus’ new programme said the scheme will offer “real benefits” to employees.

He said: “We’re not the sort of company that would go with a traditional car scheme.

“Being able to offer something that promotes cleaner transport has been a real benefit to helping our team live our mission of a more sustainable world .

“They are amazed at what a brilliant deal this is.”

Read more: Express

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Plug-in vehicle sales account for almost 14% of all new car sales in March

UK electric and hybrid car sales hit record levels in March, traditionally the biggest month of the year for motor dealers, as demand for greener vehicles surged despite overall trade remaining lower than before the pandemic.

Sales of battery electric cars and plug-in hybrids accounted for a combined 13.9% of the market, up from 7.3% a year earlier, in a sign of the accelerating switch to cars with lower carbon exhaust emissions, according to preliminary data from the Society of Motor Manufacturers and Traders (SMMT).

Buyers picked up 22,000 electric cars and another 17,000 plug-in hybrids, which combine a battery with an internal combustion engine.

Car number plates change in March, meaning many buyers hold off until then in order to keep a higher resale value. However, the pandemic has depressed sales for more than a year, and the latest data shows last month’s numbers were still down about 37% below average March levels of 450,000 between 2010 and 2019.

The market has improved compared with March 2020, when the first lockdown began, with new car registrations rising 11% last month to 284,000.

Car dealers have managed to eke out increased sales during lockdowns by bringing in new ways of shopping, including click and collect. The lobby group estimates that the car industry has lost £22.2bn in sales over the past year, but is hoping for a bounce-back as showrooms reopen.

Sales data will be flattered for the next few months by comparisons with the early stages of the pandemic in spring 2020, when all dealerships in the UK were forced to close. In April 2020 – the first full month of lockdown restrictions – sales dropped by 97% to their lowest level since the aftermath of the second world war.

Mike Hawes, the SMMT chief executive, said there was optimism in the industry that sales would recover after the toughest year in modern history for the automotive sector.

“We know we will see record-breaking growth next month given April 2020 was a washout, but a strong and sustainable market is possible if customers are attracted to the choice and competitive offer the industry is able to provide within the safest of showroom environments,” he said.

Dealers will be allowed to welcome customers into shops on 12 April in England, the largest UK market, when non-essential shops will reopen.

Read more: The Guardian

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European sales of fossil fuel vehicles took a massive hit last year, dropping by 5 million vehicles or more than a third compared to 2019. Meanwhile, electric vehicles appeared immune to the coronavirus as their sales more than doubled. EVs are gaining a foothold in Europe.

The success of electric vehicles (battery electric vehicles – EVs/BEVs) despite the pandemic goes to show that an increased availability of different models, improved technology and favourable framework conditions are altogether starting to convince consumers to make the switch to electromobility.

In 2020 Europeans reduced their spending overall due to the pandemic[1], and cars were no exception. EV sales, though, appeared unphased by COVID-19 as their sales increased by 107 %. The very same pandemic saw fossil fuel vehicle (internal combustion engine vehicle – ICEV) sales plummeting.

Looking at the data from most European markets[3], diesel vehicle registrations had been in decline for a few years already, partly due to Dieselgate and rigorous air pollution measures across Europe. In 2020 they continued their downward trend in new car registrations, albeit at an accelerated pace, ending up at just over 3 million units. That’s a decrease of 35 % compared to the almost 4.8 million units registered in the previous year.

Petrol vehicles had a similar decline at 37 % in the same markets; however new petrol car sales had been steadily rising prior to 2020, meaning the pandemic impact on petrol cars was even greater. New petrol car registrations ended up at just above 5.7 million, a reduction of 3.4 million from the almost 9.2 million new vehicles registered in 2019.

Overall, then, cars relying solely on combustion engines for propulsion lost more than 5 million sales last year, slashed by more than a third from the year before.

Turning our attention to pure electric vehicles (battery electric vehicles, BEVs), sales skyrocketed – at least relatively speaking. EV sales more than doubled in 2020, from 359,000 in 2019 to 745,000. A 107 % increase is a huge one, even though total sales volume is still not up there with petrol and diesel.

Put differently, it becomes instantly clear that electric vehicles are closing the gap to fossil fuel vehicles: In 2019 Europeans bought one EV per every 39th fossil fuel vehicle. In 2020, the balance shifted to one EV per every 12th fossil fuel vehicle.

Hybrid vehicle sales went up as well. Plug-in hybrid vehicle (PHEV) sales actually more than tripled. In total numbers, though, hybrids were still outsold by pure EVs.

One might think that demand for EVs is more resilient to a pandemic because their buyers are more financially resilient, given the higher purchase price of an EV compared to a fossil fuel equivalent. Actually, the numbers suggest this is not the case. For new cars in general, demand dropped for both compact cars and large SUVs, by 24 and 6 percent respectively[4], meaning cars at both ends of the price range were negatively affected – albeit SUVs a tad less so. This in stark contrast to the aforementioned sales increase of EVs by 107 percent.

Moreover, due to falling production costs and EV-friendly incentive schemes across Europe, EVs are not that comparatively expensive anymore. The average price paid for a new car in the UK regardless of fuel type was £33,600[5] in 2018. The new average-sized “people’s EV” from Volkswagen, the ID.3, starts at £31,700[6]. And that’s just the purchase price – factoring in the total cost of ownership, even the most expensive ID.3 at £42,300 will likely outperform the average petrol car in terms of cost within a few years. Romania will give you a €10,000 grant to purchase an EV if you scrap a fossil fuel vehicle at the same time. In fact, 26 out of 27 EU countries plus the UK, Norway, Iceland and Switzerland all favour EVs in their taxation system, through grants and/or by other means[7].

In other words, economic inequalities between the average car buyer and the average EV buyer may only explain a small part of the discrepancy in new car registrations. At Bellona, we firmly believe that the numbers prove that car buyers have more faith in electric vehicle technology than conventional vehicle technology – the pandemic has just proved that EVs are future-proof.

If we try to imagine what would have happened without the pandemic, by just following the trendlines, diesel would probably have continued its decline whilst petrol sales could still have been increasing. Actually, already by the third quarter of 2020 new car registrations had bounced back to near pre-pandemic levels, and from Q3 to Q4 total sales remained almost level whilst petrol decreased notably, and electric sales increased by 128,000 units quarter-on-quarter. This strengthens the hypothesis that EVs didn’t just experience a temporary pandemic boost.

Read more: BELLONA

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