Electric cars sales to drivers fall by almost a fifth
Sales of electric vehicles (EVs) to ordinary drivers have plunged by almost a fifth this year, amid calls for Jeremy Hunt to revive the stalling market by cutting taxes.
Consumer EV sales were 17pc lower for the first two months of 2024 compared to the same period a year earlier.
About 35,900 new battery EVs were registered in January and February overall, according to the Society of Motor Manufacturers and Traders (SMMT), an increase of 21pc compared to a year earlier.
However, just 6,500 of those were bought by private consumers with the rest sold to businesses or fleet operators such as car rental firms.
Sales to individuals fell from 7,900 a year earlier, a drop of 17pc.
Experts warned the latest numbers showed the market had “plateaued”, with the SMMT pointing to a “triple tax barrier” that was putting people off.
The SMMT wants the Chancellor to cut the VAT levied on EV purchases and on public charging, as well as an easing of road taxes set to be introduced from next year.
Mike Hawes, the SMMT’s chief executive, said Mr Hunt’s Budget was “an opportunity to ensure that growth is greener” from March, traditionally the industry’s best month.
He added: “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.
“It will deliver a faster and fairer zero emission transition, putting Britain’s EV ambition back in the fast lane.”
The SMMT has estimated that cutting VAT on purchases from 20pc to 10pc would save the average EV buyer £4,000.
Separately on Tuesday, bosses at car dealer group Inchcape also predicted only “moderated” sales growth in 2024 as they blamed a weakness in “certain markets”.
Following the warning, the company’s shares plunged more than 10pc.
As well as high taxes on EVs, unevenly distributed charging infrastructure and continued high purchase prices have been blamed for the sales downturn.
The gloomy sales figures come after prior SMMT stats showed EVs share of the new car market had slipped from 16.6pc to 16.5pc in 2023.
There has been some more positive news in the second hand market, however, where sales of EVs almost doubled to 118,973 last year.
Richard Peberdy, UK head of automotive at KPMG, said: “Ongoing pressure on household budgets and a higher cost of car finance mean that it’s still a difficult economic period for many people wanting to buy a new car, and a challenge for those trying to sell them.
“While the used EV market is growing, sales growth of new EVs to consumers has plateaued. Many in the car industry are looking to this week’s Budget and hoping that demand can be stimulated by the likes of cutting VAT on EV purchasing and at public charge points.”
Fleet operators and businesses remain by far the biggest buyers of EVs, helping to offset the fall in consumer sales.
Businesses are still able to access support and tax breaks when buying an EV. By contrast, grant funding for private buyers was withdrawn in 2022.
