New car sales up 9.8% in 2023, but BEV sales nosedive as private buyers hold back

New car sales for 2023 were up 9.8% year on year, led by fleet investment, according to the full-year figures from the SMMT released today (Friday 5 January), with 1.903 million new cars leaving dealer showrooms.

 

While overall sales were still 17.7% under the levels seen before the pandemic, 2023 was the best year for new car sales since 2019. 

 

817,673 of the total were sales to private buyers, and superminis, dual purpose and lower medium cars, made up the majority sold, at  29.8%, 28.6% and 28.2% respectively.

 

In terms of drivetrain, hybrid electric vehicle  (HEV) sales were up 27.1%, achieving 12.6% market share. Plug-in hybrids (PHEVs) saw a a 39.3% surge, hitting  7.4% of the total. However, battery electric vehicle (BEV) sales fell 17.8% to 27,841 units. Most of these were sold to business and fleet buyers, while one in 11 private buyers opted for a BEV.

 

Commenting on the figures, SMMT Chief Executive Mike Hawes said:  “With vehicle supply challenges fading, the new car market is building back with the best year since the pandemic. Energised by fleet investment, particularly in the latest EVs, the challenge for 2024 is to deliver a green recovery. Government has challenged the UK automotive sector with the world’s boldest transition timeline and is investing to ensure we are a major maker of electric vehicles. It must now help all drivers buy into this future, with consumer incentives that will make the UK the leading European market for ZEVs.”

 

SMMT Chief Executive Sue Robinson observed: “The latest figures for December bring a positive conclusion to what has been a consistent year of growth for the UK automotive sector. However, whilst December proved to be a strong month for EVs, it is concerning to see that electric cars only accounted for 16.5% of new vehicles sold in 2023, down from 16.6% in 2022. The lack of clarity from the Government on EVs, such as the pushing back of the ICE ban from 2030 to 2035 appears to have impacted consumer confidence on electric. 2024 is set to be an important year for the UK automotive sector particularly with the continued shift towards electric. With the ZEV mandate becoming law on Wednesday, electric vehicles look set to gradually increase their market share and gain ground on petrol vehicles which currently hold the largest market share in the UK.  However, these figures outline that there remains important issues which the Government will need to tackle for the year ahead such as the availability of EV charging infrastructure across the country. The UK also remains the only major market in Europe without incentives for private buyers with France recently introducing measures and Italy also looking set to offer incentives for EVs. It will also be interesting to view the progress of new Chinese manufacturers which will enter the UK market this year. 

 

Mark Oakley, Director of AA Cars added: “The new car market ended 2023 on a high having weathered a turbulent economic backdrop, with total sales finishing nearly 18% higher than 2022. However to keep the momentum going, manufacturers must continue to adapt to changing trends and the increasing take-up of EVs.

 

“Just months after Ford ended production on the Fiesta, the company can once again boast of having the nation’s best-selling car, with the Puma leapfrogging the Nissan Qashqai and Vauxhall Corsa to secure top spot. Drivers continue to show an appetite for larger family cars such as the Puma, and AA Cars data reveals that over the past 12 months SUVs have been among the fastest-selling second-hand vehicles too.

 

“Overall, the SMMT’s data shows sales of brand new EVs increased compared to last year thanks to greater choice and intense competition between manufacturers, but the industry may face a challenge to maintain such an upward trajectory in 2024.

 

“Higher levels of supply and falling prices of second-hand EVs should boost demand in the used EV market, but greater efforts still need to go into promoting them. Dealers have an increasingly important role to play in advising drivers on the benefits of EVs and answering their questions.”