The UK new car market recorded its second successive year of growth as electric vehicles (EVs) took a record annual volume and market share of 19.6%.
The car market grew by 2.6% on the previous year according to figures from the Society of Motor Manufacturers and Traders (SMMT), as a result of fleet sales, which in 2024 were up by 11.8% and accounted for 59.6% of all new car registrations.
SMMT called it a challenging year for the sector “as manufacturers strove to create demand for electric vehicles in a bid to meet new mandated sales targets”. However, December was strong for EVs, with 43,656 new battery electric vehicle (BEV) registrations accounting for 31.0% of the market – the highest since December 2022’s record 32.9%.
The figures show that BEVs made up 19.6% of the market in 2024, which is short of the 22% required by the zero emission vehicle (ZEV) mandate. According to SMMT, the automotive industry has “pulled every lever” trying to achieve this target and manufacturer discounting totalled an unsustainable figure over £4.5 billion in 2024.
The trade association states that only one in 10 private buyers choose an EV, despite investment in new technologies and products, and in 2024 petrol engine cars accounted for 61% of demand, although across the market pure petrol and diesel car registrations fell by -4.4% and -13.6% respectively
Hybrid electric vehicles were second-most sought after in 2024, taking 16% of demand. In contrast, around 64,000 more BEVs were registered by businesses and fleets than a year ago, with such vehicles representing a quarter (25.4%) of those segments’ registrations. SMMT said this demonstrates the effectiveness of compelling tax incentives given to non-private buyers.
The ZEV mandate threshold for 2025 is for 28% of manufacturers’ sales to be EVs which would require a market uplift of just under 50%. In the face of this, and industry pushback, the government is consulting on the ZEV mandate requirements and the ban on internal combustion engine (ICE) vehicles.
Notably, BMW Mercedes and Hyundai all exceeded their targets for EV sales, but Ford, which has been vocally against the ZEV mandate recently, fell short.
The government is being pushed to incentivise EV uptake for private buyers (in the way that it has for fleet owners) and others claim that a lack of charging provision (despite evidence suggesting the contrary) must be addressed, too.
Mike Hawes, SMMT chief executive, said: “A record year for EV registrations underscores vehicle manufacturers’ unswerving commitment to a decarbonised new car market, with more choice, better range and increased affordability than ever before. This has come at huge cost, however, with the billions invested in new models being supplemented by generous incentives which are unsustainable.
“We need rapid results from the regulatory review and urgent substantive support for consumers – else automotive investments will be at risk and the jobs, economic growth and net zero ambitions we all share in jeopardy.”
ZEV mandate not missed, other reports say
There is a flexibility written into the ZEV mandate that allows car makers credits towards the target that can be earned from the sale of large numbers of low emission petrol and diesel cars, including hybrids.
As such, analysis of the SMMT figures by the Energy and Climate Intelligence Unit (ECIU), states that a further 3% credit was earned by the sale of low-CO2 emissions petrol and diesel vehicles (although this is something the government will have to confirm later in the year), means the 22% target has indeed been met.
Colin Walker, the ECIU’s head of transport, said: “Suggestions that the car industry was struggling, and that the ZEV mandate target was too onerous, have proven to be wrong, and were often based on a misunderstanding of how the policy actually works.”
According to the ECIU, the ZEV mandate is driving competition which, in turn, drives down the sticker price for new EVs. This will have a knock-on effect on the secondhand market, enabling more households access to the cheaper running costs of EVs.
Walker added: “The mandate has provided certainty for investors to pour millions into the charging network and also British renewables which will provide the power. Any major changes would jeopardise future investment and jobs, particularly as the UK exports most of the cars we produce and those markets will increasingly demand electric, not petrol, vehicles.”
