12 Jul 2024
The voice of the independent garage sector

Under the hedge?

Is the fact that private buyers are still cautious on the EV front a cause for concern, or the inducement Government needs to add more support? 

There were a number of announcements around EVs and hybrids in recent weeks, but September’s sales figures indicated that private buyers are still hedging their bets.

Commenting on the recent House of Lords inquiry into electric vehicle adoption, Hayley Pells, Policy and Public Affairs Lead at the IMI, said: “The IMI fully supports the UK government’s ambition to transition to zero emission vehicles. This new inquiry, with its focus on understanding the barriers, costs, and benefits of transitioning by the 2030 and 2035 phase-out dates, is timely and essential.

“We are particularly pleased to see that the Environment and Climate Change Committee, led by Baroness Parminter, recognise the importance of seeking input from the automotive sector itself, as well as motorists. With our unique insights across the automotive sector, the IMI is committed to contribute to the inquiry. We stand ready to work alongside the government, our members, and the wider industry to achieve a seamless transition to electric vehicles.”

Commenting on the importance of the government’s approach, Hayley said: “Incentivising a robust UK EV market is vital. The phase-out dates are aggressive but achievable with a collective effort, industry partnerships, and clarity in policy. The development of a clear roadmap, complete with key dates and timelines, will aid all stakeholders in preparing for the transition.”

On the EV market, she said: “The variety of EV options, affordability, and accessibility play a crucial role in consumer adoption. We advocate for initiatives that increase public awareness about the benefits and practicalities of EV ownership.”

Moving onto the user experience, she said: “Charging infrastructure, standardisation, and dealer preparedness are pivotal. We aim to work closely with our members and stakeholders to ensure that the aftersales network is equipped to support the surge of EVs on our roads.”

On End of Life disposal of EVs, she added: “Developing sustainable solutions for battery disposal and recycling is paramount. As an industry, we must consider the entire lifecycle of EVs.”

Electric MINI to be made in UK following investment
EV production in the UK received a boost following BMW’s announcement that MINI’s manufacturing base in Oxford and body pressing plant in Swindon will receive a £600 million investment to enable the next wave of electric Minis to be built in Britain.

The EV MINI Cooper and the MINI Aceman will be built at Oxford from 2026. Production will be all-EV by 2030. Production on these models will begin in China, with exports set to will begin early next year.
The Oxford plant has been producing the current MINI Electric since 2019, alongside ICE models. Output from MINI Plant Oxford currently includes the MINI 3-door, 5-door the MINI Clubman and the MINI Electric. Commenting on the announcement, Prime Minister Rishi Sunak said: “BMW Group’s investment is another shining example of how the UK is the best place to build cars of the future. By backing our car manufacturing industry, we are securing thousands of jobs and growing our economy right across the country.”

Business and Trade Secretary Kemi Badenoch said: “This decision is a big vote of confidence in the UK economy and the work of this Government to ensure the continued strength of our world-leading automotive sector. We are proud to be able to support BMW Group’s investment, which will secure high-quality jobs, strengthen our supply chains, and boost Britain’s economic growth”.

Milan Nedeljković, Member of the Board of Management of BMW AG responsible for production, said: “With this new investment we will develop the Oxford plant for production of the new generation of electric MINIs and set the path for purely electric car manufacturing in the future.”

Stefanie Wurst, Head of the MINI brand, observed: “MINI has always been aware of its history – Oxford is and remains the heart of the brand. I am delighted that the two new, fully electric MINI models – the MINI Cooper and MINI Aceman – are also being produced in Oxford, thereby confirming our path to a fully electric future. The continuing high demand for our locally emission-free vehicles shows the openness of the global MINI community to electromobility, which we will be able to serve optimally in the future, also thanks to Oxford.”

New car sales up 21% for September, but private buyers in minority in electric market
New car sales were up 21% for September’s number plate change with 272,610 sold through the month, according to the latest figures from the SMMT. While this was the 14th consecutive month of growth sales were still 20.6% below pre-pandemic levels.

52.5% of sales were made to large fleets, although private consumer demand did increase, by 5.8% s remain -20.6% below pre-pandemic levels. Plug-in hybrid vehicles (PHEVs) sales were up 50.9% making up 6.8% of the total, while hybrid electric vehicles (HEVs) were up 30.7%, representing 13.9% of all sales. Battery electric vehicle (BEV), sales were up 18.9%, although in terms of market share BEVs have fallen to 16.6% of the total, down 0.3% on this time last year. The increase in BEV sales is the result of fleet purchases, which were up by 50.6%. Meanwhile, private BEV registrations fell by 14.3%. Less than one in ten private buyers bought a BEV.
Mike Hawes, SMMT Chief Executive, said, “A bumper September means the new car market remains strong despite economic challenges. However, with tougher EV targets for manufacturers coming into force next year, we need to accelerate the transition, encouraging all motorists to make the switch. This means adding carrots to the stick – creating private purchase incentives aligned with business benefits, equalising on-street charging VAT with off-street domestic rates and mandating chargepoint rollout in line with how electric vehicle sales are now to be dictated. The forthcoming Autumn Statement is the perfect opportunity to create the conditions that will deliver the zero-emission mobility essential to our shared net zero ambition.”

NFDA Chief Executive Sue Robinson said: “Vehicle sales have continued to rise despite the uncertainty created by the UK Government change of policy on EV.”

She continued: “Recent policy changes in relation to ULEZ and the sale of new petrol and diesel vehicles has created uncertainty in the industry. In a recent poll, NFDA found that 62% of surveyed dealers are expecting demand for EVs to decrease and 80% feel that the UK Government needs to introduce more price incentives for consumers.”

On the preponderance of fleets in the EV side of the market, John Wilmot, CEO, car leasing comparison website LeaseLoco, noted: “There is an urgent need for financial incentives designed to make electric cars more accessible to those who cannot take advantage of salary sacrifice schemes and corporate discounts. Currently, only company directors and employees with access to salary sacrifice can benefit from the 2% benefit-in-kind taxation rate.
“We need a more level playing field. Financial fairness should be extended to all, not just a select few, and if the government is committed to achieving net-zero emissions, addressing this issue is crucial.”

Mark Oakley, Director of AA Cars, added: “September’s arrival of the new ‘73 registration plates helped the new car market extend its unbroken run of increasing sales to an impressive 14 straight months. Demand is holding up well despite the financial challenge households are facing, with many drivers who’d been waiting to upgrade or replace their old car choosing to do so as the new plates came in. The supply problems of last year are thankfully in the rear-view mirror now.

“For now, it’s too early to gauge what impact, if any, the Government’s decision to push back the upcoming ban on the sale of new petrol and diesel cars will have on demand. Either way, greater choice and increasing competition between EV manufacturers continue to drive up sales of new electric models – which were up 18.9% year on year in September. This in turn is boosting supply in the used car market, as more second-hand and nearly-new EVs appear on dealers’ forecourts and provide a more affordable option for drivers who are looking to go green.”