UK Car Sales in September… Not pretty

UK Car Sales in September… Not pretty

Covid19 has undoubtedly wreaked havoc on new car sales year to date, and sales figures for this past September certainly reinforced that: just 328k new cars were registered here in the UK which was the worst September this century. This represents a -4.4% drop from last September while year to date, we’re down -33%. Ouch.

The writing has been on the wall for a while – August sales were down year over year with just 87k new cars registered (-5.8% from Aug 2019). It should be noted that August is traditionally a slow month for new car sales as car buyers prefer to wait for the new registration plates that come on Sept 1st (the third and fourth digits on any licence plate that you see, now “70”). And yet, this past September offered no respite.

The breakdown of type of cars sold is interesting amidst a shift of buyers to Electric Vehicles (EVs). So how did EVs fare? Despite huge increases year over year, the percentage of cars sold in September that were pure electric (classed as “BEV” for Battery Electric Vehicle) remains small compared to the more traditional diesel and petrol variants. To be precise, of the 328k cars registered last month, 21,903 cars were pure electric, or 6.7% of the total. This compares to 7,704 sold in September 2019, or 2.2% of total market share. A healthy increase, yes, but still a small percentage of overall sales. In fact, year to date, EVs have made up just 5.4% of all new vehicles registered.

Where it becomes more interesting is the new car registration figures of Mild Hybrid Electric Vehicles (MHEV). These are cars that have a (very) small electric motor that support a conventional petrol or diesel engine during acceleration, braking and cruising but cannot be driven on battery power alone. This past September, 43,866 MHEV’s were sold which marks a massive jump from the 13,920 sold in September 2019. Meanwhile, PHEVs (Plug-In Hybrid Electric Vehicles ala Mitsubishi Outlander PHEV, or any Volvo, Audi or Mercedes Hybrid) also jumped from 5,197 sold in September 2019 to 12,400 sold last month. Not a bad increase. However, the Society of Motor Traders and Manufacturers (SMMT) – who compile and study the data very closely – notes that of all new cars for sale at dealerships, 1 in 6 models is either an EV or PHEV but that just 1 in 13 of all new cars sold fall into either of these categories. So greater EV choices, yes, but not great uptake.

Recently, the AA conducted a survey of nearly 18k people to ask them whether they would consider purchasing an EV as their next vehicle. Assuming the survey stipulated the consideration of pure Battery EVs (as opposed to plug-in or mild hybrids), the results showed that just under half (47% to be exact) said they would. This is certainly encouraging for Government policy makers who have set a 2035 date for the end of petrol and diesel new car purchases.

Unsurprisingly, high prices, battery charging times/range and poor charging infrastructure (particularly here in the UK which remains a laggard compared to other European countries) remain the key stumbling blocks for those considering the purchase of an EV. I have also noticed an increased awareness amongst buyers that all vehicles – EVs included – are guilty of CO2 emissions. In the case of EVs, CO2 emissions exist through complex manufacturing processes, including the mining of rare metals used in the lithium-ion batteries of EVs. Further, EVs aren’t immune to brake wear, tyre wear and general road decay which, when added up, contribute half of the particle pollution from road transport, according to a report by our very own government’s air quality expert group back in 2019. That’s a lot, and EVs are not exempt to these charges.

And yet the perceived environmental benefits, particularly in city centres, for a society to roll exclusively in BEVs are clear; we all want to breathe air that is free from the exhaust smoke emitted from the tailpipes of either petrol or diesel cars. However, with only 5.4% of vehicles sold year to date being BEVs, something tells me that we could be driving our current petrols and diesels for longer than policy makers want us to. Aside from the need for better battery technology to allay consumer concerns, greater government subsidies and improved infrastructure are crucial to get all of us to buy an electric vehicle. And yet with our economy in a weakened state because of Covid19 plus the inevitable economic challenges that will come with Brexit, something tells me that EVs won’t be driving the agenda.

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