Automotive retail industry figures have renewed calls for the Government to rethink the Zero-Emissions Vehicle (ZEV) mandate after August new car market figures revealed continuing stagnation in retail take-up of electric vehicles.

In what is traditionally one of the quietest months of the year for new car sales, with many buyers preferring to wait until September’s new number plate, the slight dip in overall registrations of 1.3% revealed in the latest figures from the Society of Motor Manufacturers and Traders (SMMT) was expected.

And while battery-electric vehicles (BEVs) surged by 10.8%, taking close to 23% of the market over the month, this was not the good news that the figure suggested, the rise primarily driven by heavy discounting by manufacturers trying to meet the 22% zero-emissions sales figure the mandate requires them to hit by the end of 2024.

The take-up of BEVs is still also being driven by the fleet market, drivers of company cars enjoying benefit-in-kind tax advantages to drive electric – retail sales of BEVs continue to stall just six years  before the Government’s indicated plans to ban the sale of new petrol and diesel cars.

As a result, and with the Autumn Budget looming on 30th October, the industry is calling for urgent action to bolster the market for new EVs, including public charge-point provision targets that match those placed on industry, re-introducing incentives for private buyers and the removal of disincentives, including the Vehicle Excise Duty expensive car supplement that is set to be introduced in 2025.

SMMT Chief Executive Mike Hawes described the August growth in EV sales as welcome, but in a very low volume month subject to distortions, ahead of September’s number plate change which would be a true barometer for market demand.

“Encouraging a mass market shift to EVs remains a challenge, however, and urgent action must be taken to help buyers overcome affordability issues and concerns about chargepoint provision,” Hawes said.

Responding to the figures Philip Nothard, Insight Director of vehicle marketing specialist Cox Automotive, commented that the ZEV mandate may be grounded in good intention, but is putting the new vehicle sector under impossible and unreasonable pressure.

“The tactics we are likely to see deployed by OEMs and retailers to hit their numbers in the closing months of this year will be drastic, expensive and risky, creating an unrealistic and unnatural market with potentially far-reaching consequences over the long term,” Nothard said, adding; “We urge the government to listen to the sector’s feedback, review the mandate and implement support packages to fast-track EV adoption.”

Lisa Watson, Director of Sales at Close Brothers Motor Finance added that while demand for battery electric cars surged in August, fleet statistics continue to skew the data generally. “Our research amongst EV drivers found that the overwhelming majority (92%) of those who have made the switch to EV are happy with their car and would purchase another one – but it’s getting them to make the switch from traditional fuel types that can be challenging,” Watson said.

“High upfront cost, lack of affordable options, and infrastructure shortfalls continue to act as barriers for motorists. With energy prices set to increase next month, more will need to be done if we want drivers to plug into electric.”

Watson added that with drivers already feeling they’re being hit financially from all sides the Government will need to find ways to encourage the uptake of EVs if the ZEV mandate is to be achieved.

Overall in August 84,575 new cars were registered, 1,082 fewer than in the same month last year. Fleet purchases again accounted for six in 10 cars registered, or 51,329 units, despite a 1.2% drop compared with August 2023, while registrations by private buyers remained flat, up 0.2% units to 32,110.

Registrations of petrol and diesel vehicles continued to fall, down by 10.1% and 7.3% respectively, but they still accounted for more than half (56.8%) of all new car uptake in August. The recent surge in plug-in hybrid (PHEV) registrations was brought to a halt, slipping by 12.3%,  but hybrid electric vehicle (HEV) uptake increased, by 36.1%, to take 13.8% of the market.

Over the year BEV market share has edged up to 17.2% and is expected to rise further to 18.5% by the end of 2024, but this will still be short of the 22% required by the ZEV Mandate.

“August played out as we expected; it is traditionally a low-volume month,” Nothard commented. “We stand by our forecast of 2.02m registrations for the full year. Still, we are in no doubt that September – the second most critical month of the year for registrations – and Q4 will be an extremely challenging period for the sector.”