Demand for new diesel cars is growing faster than for pure battery electrics, preliminary figures show (Image: Niall Carson/PA)
New figures have indicated a surprising trend, with private demand for new diesel cars outpacing that for pure battery electrics. The Society of Motor Manufacturers and Traders (SMMT) reported that registrations of new diesel cars for private buyers in September saw a 17.1% increase from the same month in 2023, an additional 1,367 units.
This contrasts with a modest 3.6% year-on-year growth for pure battery electrics, which only rose by 410 units despite significant discounting efforts by manufacturers. According to the SMMT, car makers are set to “spend at least £2 billion on discounting electric vehicles (EVs)” this year to combat the “underlying paucity of demand”.
September broke records for overall battery electric new car registration volumes, reaching 56,387 units. In response to these trends, the SMMT and senior UK leaders from major vehicle manufacturers such as Ford, Stellantis, JLR, and Volkswagen Group have penned a letter to Chancellor Rachel Reeves urging for immediate support to boost electric vehicle uptake before her Budget announcement on October 30.
The industry leaders have proposed measures like cutting VAT on new EV purchases by half and reducing VAT on public charging from 20% to 5%, aligning it with the home charging rate. They argue: “We appreciate the severe constraints on the public purse, but deliver this support to consumers and the benefits are myriad: a thriving market, enhanced consumer choice and affordability, investment attractiveness, high-value job creation, cleaner air, quieter streets and economic growth.”
The signatories stated: “We know your Government is committed to a vibrant and competitive UK automotive industry. With the right measures, the right consumer support, we can fix the foundations of this transition and with it deliver the biggest technology transition ever attempted, and the economic growth and environmental improvements that should be non-negotiable.”
They further warned that the industry will “likely miss” targets set by the zero-emission vehicle mandate, which requires at least 22% of new cars and 10% of new vans sold by each manufacturer in the UK this year to be zero emission, typically meaning pure electric. Manufacturers could face a £15,000 fine per polluting vehicle sold above the limits from the Government, or they may need to purchase credits from rival companies.
The letter cautioned that “these are not consequence-free choices”, and it is “the consumer who pays” as costs are passed on. New car registrations last month saw a 1.0% increase year on year to 275,239 units.
September is traditionally a strong month for the industry due to the release of new number plates. Growth was driven by purchases for fleets owned or leased by businesses or other organisations, which were up 3.7%.
Private consumer demand fell by 1.8%, while the smaller business sector saw volumes decrease by 8.4%.
SMMT Chief Executive Mike Hawes said: “September’s record EV performance is good news, but look under the bonnet and there are serious concerns as the market is not growing quickly enough to meet mandated targets. Despite manufacturers spending billions on both product and market support – support that the industry cannot sustain indefinitely – market weakness is putting environmental ambitions at risk and jeopardising future investment.”
Ian Plummer, Auto Trader’s commercial director, said: “Electric vehicle sales surged in September. Record discounts are driving the interest as brands and retailers do all they can to stimulate sales, showing once again just how sensitive the market is to financial incentives, and the importance of overcoming the current EV cost barrier.
“There’s still much to do to drive further levels of interest and sales – and discounts can only last so long. Other measures are needed to help buyers make the switch to electric cars which still carry a 30% price premium over their ICE (internal combustion engine) counterparts.”