Growth for UK new-car market in 2024 as BEVs pushed

07 January 2025 Read next How will a Trump presidency impact the global EV market in 2025 and beyond? 06 January 2025 Read next The Automotive Update: Tesla battles BYD, Japanese merger talks, and a critical consultation 03 January 2025 Read next Is a full-year decline in sight for EU new-car registrations? 19 December 2024 With a big focus on zero-emission deliveries in 2024, how did the UK new-car market cope with unstable registrations? Autovista24 special content editor Phil Curry assesses the region’s performance. The UK experienced a turbulent 2024 for new-car registrations, with challenges for carmakers when it came to powertrain technologies. The zero-emission vehicle (ZEV) mandate and changing attitudes to petrol saw figures fall in the second half of the year. The latest data from the UK’s automotive industry body, the SMMT, shows that deliveries fell by 0.2% in December. In total, 140,786 units were registered. This was just 306 passenger cars less than the total recorded a year ago. It was, however, the third consecutive month of decline in the UK, the first time this has occurred since July 2022. The small difference did little to affect the full-year total, which ended up by 2.6%, with over 1.95 million units registered. Deliveries were up by 6% midway through 2024. But then in August, the UK saw its first monthly decline in two years. Three more drops followed in October, November and December, ending the year on a sour note. Yet 2025 could be more bring more challenges. This includes shifting attitudes towards internal-combustion engine (ICE) models. There has also been another adjustment to the phase-out date of new petrol and diesel car sales, with a consultation underway on the changes and the ZEV mandate. All this means the industry faces an uncertain future. Boom for UK BEVs December saw battery-electric vehicles (BEVs) achieve 43,656 registrations, up by 56.8% year on year. The technology achieved a 31% market share in the month, the highest since December 2022, when models made up 32.9% of deliveries. This meant that BEVs ended the year with 381,970 registrations, the highest total of all European markets, overtaking Germany. This figure was up 21.4% year on year, with the powertrain accounting for 19.6% of the overall market, up by 3.1pp from 2023. Despite reports of a slowdown, the market has progressed well and it is currently the second-most-popular powertrain in the UK. While impressive, some strategies have likely been employed to achieve this result. The SMMT highlighted that manufacturer discounting totalled over £4.5 billion (€5.4 billion) last year. It is also possible that some carmakers pushed BEV deliveries out as quickly as possible in December, to ensure they were registered in 2024. This is backed by the improvement in BEV registrations in the last two months. December’s rise followed a 58.4% improvement in November, as carmakers raced to meet targets. ZEV mandate manipulation These tactics mark the end of the first year of the ZEV mandate. In 2024, a total of 22% of a carmaker’s fleet had to be either all-electric or powered by hydrogen fuel cells. With fines of £15,000 per vehicle under the required target, several brands faced significant financial penalties. This may have impacted the year’s final numbers. While pushing BEVs, some carmakers may have held back deliveries of petrol, diesel, plug-in hybrid (PHEV) and full-hybrid (HEV) models. The extent of any holdbacks will not be confirmed until the publication of January’s registration figures. This could count against carmakers in 2025 when the ZEV mandate target increases to 28%. But increasing BEV numbers while stunting other powertrains would help improve shares for 2024. This limits the chances of fines for brands. However, the SMMT remains cautious over the potential of penalties. It confirmed that the average new-car CO2 emission fell by 6.2% to 102.1g/km. However, the extent to which this will help remains unclear until confirmed baseline CO2 figures are provided by the government. Yet a spokesperson for the Department for Transport seemed optimistic. ‘Thanks to the flexibilities in the ZEV mandate, we are confident the whole market has complied with the 22% target and that no car manufacturer will need to pay fines,’ they said. Fleets drive BEVs The SMMT highlighted that one of the major constraints to growth for the BEV market was lacklustre demand from private buyers. Last year, just one in 10 chose an electric vehicle (EV), as a BEV or a PHEV. Petrol remained the most popular powertrain among these buyers. The fuel type commanded 61% of demand, with full hybrids (HEVs) in second place with 16%. Conversely, around 64,000 more BEVs were registered by businesses and fleets than a year ago. All-electric cars represented 25.4% of those two segments’ registrations. This highlighted the effectiveness of compelling tax incentives that do not apply to private buyers. With the fleet sector taking up 59.6% of the total market in 2024, this has likely helped carmakers when it comes to reaching ZEV mandate targets. However, it will take more effort to make BEV powertrains appeal to private buyers. Charging infrastructure still requires investment, and carmakers need support to curb discounting. ‘A record year for EV registrations underscores vehicle manufacturers’ unswerving commitment to a decarbonised new car market, with more choice, better range and increased affordability than ever before,’ commented SMMT chief executive Mike Hawes. ‘This has come at huge cost, however, with the billions invested in new models being supplemented by generous incentives which are unsustainable. We need rapid results from the regulatory review and urgent substantive support for consumers, or automotive investments will be at risk and the jobs, economic growth and net zero ambitions we all share [will be put] in jeopardy.’ Plans under consultation The ZEV mandate has caused many headaches for carmakers in 2024, with sales of BEVs slowing throughout the year. In December, the UK Government announced a consultation. Part of this will examine the mandate and its effectiveness as part of the country’s zero-emission transition. The consultation does not imply that the target increases will change. However, it does ask about the flexibilities currently in place and their time limits. This includes the ability to borrow credits in 2024, 2025 and 2026, and to convert any difference in CO2 baseline figures to offset ZEV targets in the same years. ‘Over the first year of the ZEV mandate, pressures on vehicle manufacturers have emerged that present additional challenges compared with when the original mandate design was consulted on,’ the document states. ‘As a result, it is appropriate to seek views on whether the current flexibilities are still fit for purpose in meeting the existing ZEV trajectory, the phase-out date for new cars that rely solely on an internal combustion engine in 2030, and the phase-out of new non-zero emission cars and vans from 2035.’ Amending the ban The government has also confirmed that it will be bringing the ban on sales of new petrol and diesel engines back to 2030. This follows plans by the previous government to extend this deadline to 2035, banning all non-ZEV models at the same time. The consultation launched in December also considers which new cars could still be sold between 2030 and 2035, when the ZEV-only rule comes into effect. ‘The consultation is an opportunity to consider stakeholders’ preferences on technology choices and the types of vehicles permitted between 2030 and 2035 alongside ZEVs,’ commented Heidi Alexander MP, secretary of state for transport. ‘It commits to maintaining the trajectories in the ZEV mandate while considering how the current arrangements and flexibilities are working and what steps can be taken to support domestic manufacturing and cement the UK’s position as one of the major European markets for ZEVs.’ Options include establishing a CO2 emissions cap. Yet, setting this at the level of the lowest-emission ICE cars could rule out most HEVs and a significant proportion of PHEVs. A fleet-wide non-ZEV emissions cap could also be introduced, giving carmakers a new target between 2030 and 2035. Alternatively, a simple rule allowing only PHEVs that emit less than 115g/km of CO2 could be considered. The consultation, which is open to responses until 18 February, does mean a further delay for carmakers. This is an additional roadblock as they look to develop their model plans for the years ahead. This will be the fourth time the non-ZEV new-car ban has been amended. It was first announced in 2017, with a target date of 2040. In 2020 this was brought forward to 2030, before its push back to 2035, which was confirmed in 2023. Petrol struggles The BEV tactics meant petrol registrations, including pure and mild-hybrid petrol engines, suffered their biggest decline since June 2022. December saw a 20.9% drop in deliveries, with 59,455 units taking to UK roads. This gave petrol a market share of 42.2%, a drop of 11.1pp compared to the same month in 2023. The performance meant the fuel type ended the year down by 4.4%, as drivers shifted away from fossil-fuel vehicles towards cleaner alternatives. However, with just over one million registrations, petrol was still the most dominant powertrain in the UK. This meant a market share of 52.2% in 2024, down 3.8pp on 2023. Diesel, meanwhile, sank further into the distance. Just 7,060 units were registered in December, down 27.4%. This gave the powertrain a 5% market share, dropping 1.9pp on December 2023. In the full year, diesel registrations fell 13.6% with just 123,104 units taking to roads. This equated to 6.3% of all registrations in the UK, a decline of 1.2pp, and the lowest share of all powertrains. Combined, ICE deliveries fell by 21.6% year on year in December. Meanwhile, in the full year, figures were down 5.5%. Hybrids power on HEVs saw a 10.4% increase during December, with 17,899 units delivered to customers. This gave the powertrain a 12.7% market share, up from the 11.5% recorded in the same period of 2023. For the whole of 2024, HEV deliveries increased by 9.6%, with 261,398 models registered. This meant the powertrain was the third-most-popular in the country, with a 0.9pp rise in market share to 13.4%. PHEVs also saw an increase in December. However, the 4.6% rise equated to just 554 more units, with a total of 12,716 cars delivered. This meant the technology gained 0.4pp on its December 2023 market share, to end the month at 9%. In the full year, PHEVs achieved 167,178 registrations, up 18.3%. This meant the technology took 8.6% of the market, up from the 7.4% recorded across the whole of 2023.

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