The UK registered its one millionth electric car last month, despite a big drop in sales, new figures suggest. New EV registrations by private buyers fell by a quarter in January, threatening to undermine the UK’s net zero promises.
Overall new car sales to private customers fell by 16% in the same period, the Society of Motor Manufacturers and Traders (SMMT) said. The figures have sparked more calls for tax cuts to boost uptake among buyers. More than 20,000 battery electric cars (BEVs) were registered in January, up by a fifth year on year and helped by generous tax incentives for company car users. It means that since 2002, one million of these cars have reached the road.
Fleet buyers – companies purchasing more than 25 units in one go – have been entirely behind the increase, with demand for BEVs growing by more than 40%.
Electric cars accounted for 14.7% of all new vehicles sold in the UK in January. Although that was an increase over the same month the year before, it was still well below the market share of 16.5% achieved for the whole of 2023.
The lack of sales to private buyers has prompted calls from the SMMT for the government to halve VAT on electric vehicles, in order to boost demand.
“It’s taken just over 20 years to reach our million EV milestone – but with the right policies, we can double down on that success in just another two,” SMMT boss Mike Hawes said.
“Manufacturers have been asked to supply the vehicles, we now ask government to help consumers buy the vehicles on which net zero depends,” he added.
EVs have lower running costs than petrol and diesel vehicles, but the upfront price is around 30-40% higher, according to the motoring organisation.
Currently those buying an EV in the UK through a business, a company car or salary sacrifice scheme can benefit from generous tax incentives. Grants for individuals were phased out by the government in 2022.
Last year, Prime Minister Rishi Sunak confirmed a ban on new petrol and diesel car sales was being pushed back five years from 2030 to 2035.
The announcement was met with a mixed response from carmakers, many of whom have begun investing heavily in electric vehicle production.
Despite the delay in the ban, firms will still be forced to meet strict quotas for selling electric cars from January, ensuring that more than one in five cars sold are zero emission models. If not, they will face heavy fines. The target will go up each year until 2030.
According to the latest SMMT figures, the overall new car market grew in January, pushed by a large increase in fleet sales, which were up by a third.
This was despite a fall in overall registrations of new private cars last month, which fell by 16%.
Fleet sales accounted for more than six in 10 new cars registered in the month, up from just over half last year.
