The Society of Motor Manufacturers and Traders (SMMT) has reported that February 2024 saw the highest volume of battery electric vehicles (BEV) sales for the month in 20 years.
The UK electric vehicle (EV) market saw its strongest February since 2004, with the number of new car registrations increasing by 14% to 84,886 units.
February marked the 19th consecutive month of growth for new EV registrations in the UK, primarily driven by sales in fleets and businesses.
SMMT also noted that although February’s growth is positive and demonstrative of ongoing robust demand for the latest vehicles, the long-term picture will become more apparent in March, the busiest market month.
Fleet domination
Fleets and businesses were responsible for the entirety of February’s increase, with registrations up 25.2% and 15.5%, respectively, whilst private buyer uptake noted a -2.6% decrease.
This has been a continuous trend identified by SMMT in the past, as the last few months have shown similar figures of fleet and business registrations significantly outweighing private registrations.
In fact, SMMT revealed in its February report that private buyers account for fewer than one in five (18.2%) new BEVs registered in 2024 so far.
This imbalance has also been felt amongst charging infrastructure firms, an example of which being Scottish start-up Evata, which launched its fleet infrastructure sharing platform in February to help improve charging availability for EV fleets.
The introduction of infrastructure specifically designed for EV fleets highlights their prominence in the UK EV markets as private sales continue to lag behind.
Upcoming challenges
SMMT also made mention of the barriers that stand in the way of furthering new car registrations for private EV drivers, the most prominent of which surrounds tax exemptions.
The research group says that halving VAT on new EV purchases would save the average buyer around £4,000 off the upfront purchase price but would cost the Treasury less than the Plug-in Car Grant that was scrapped in 2022.
Moreover, those unable to charge a BEV at home currently pay a ‘pavement penalty’ of 20% VAT on public charging – quadruple the rate paid by those with the opportunity to charge at home.
This particular ‘penalty’ has caught the eye of many EV industry members, as is evident from the open letter recently sent from campaign group FairCharge to Jeremy Hunt ahead of the 2024 Spring Budget.
The letter, co-signed by the likes of Jaguar Land Rover (JLR), Stellantis, Polestar, Autocar Magazine, Greenpeace, Transport & Environment, Zapmap and the AA, calls for a reduction in the 20% VAT applied to public charging.
The argument is that this extra cost deters potential EV drivers from transitioning, which then becomes an obstacle to the broader UK EV market growth.
This is only further confirmed by increasing energy prices impacting EV public charging costs, as Zapmap reported an 11% surge across 2023.
According to the Zapmap Price Index, the average price of charging an EV in the UK using a rapid or ultra-rapid charger increased from 73p/kWh in December 2022 to 81p/kWh. Slow charging prices also rose, increasing by 13% from 49p/kWh in December 2022 to 55p/kWh in December 2023.
These changes did not go unnoticed by EV drivers, as Zapmap noted that 62% highlighted the high cost of charging on public networks as an issue in 2023, up from 41% in 2022.
Mike Hawes, SMMT chief executive, said: “The new car market’s ability to deliver growth continues with its best February for 20 years, and this week’s Budget is an opportunity to ensure that growth is greener.
“Tackling the triple tax barrier as the market embarks on its busiest month of the year would boost EV demand, cutting carbon emissions and energising the economy.”