SMMT: ZEV mandate leaves bitter taste in mouth of UK new car sales success 2024
Were it not for the pressures put on car brands by the ZEV Mandate targets the UK’s new car market in 2024 would be seen as quite a success story.
That’s what Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, told Automotive Management in a briefing on Friday, ahead of the official publication of 2024’s results on Monday.
Preliminary data for the 2024 year-end shows the new car market ended at 1.953 million units, up 2.6% year-on-year, of which 382,000 were zero emission battery electric vehicles. This result gave BEV a market share record of 19.6%. This means that the national sales companies of some carmakers in the UK could be fined if they can’t pool, trade, or borrow zero-carbon credits from other manufacturers who have exceeded the Government target. Hawes stated that it is clear the demand for BEVs has not met the expectations of the mandate. That will require a sales uplift of 46% – to find customers for more than 550,000 new electric cars if the total market volume remains flat.
“Industry has pulled every lever to try and achieve this target, with manufacturer discounting totalling more than PS4.5 billion in 2024, an amount that is not sustainable in the long term. The SMMT said that billions of pounds in investment in new products and technologies over the last decade has delivered a record 132 ZEVs to the UK market. This is up 38% from 2023 and accounts for a quarter of all models. With an average range of nearly 280 miles, this represents more than two weeks of driving for many people. Hawes said that the lack of interest in new cars is due to the economic climate, but also to the confusion that has been created by the government’s messages over the past two years. Rishi Sunak pushed it back to 2035, but Kier Starmer now wants to bring it back to 2030. Hawes warns that the low level of interest from buyers in BEVs has a negative impact on the growth of the market. He suggests incentives like halving the VAT, delaying premium VED changes, and equalising VAT on domestic and public power to 5%. Stellantis announced the closure of their vehicle assembly plant at Luton due to the high costs of doing business in the UK. Hawes stated that the industry desperately needs to know what the result will be sooner but it is unlikely.
