The Society of Motor Manufacturers and Traders (SMMT) has released ‘In It Together: Why Every Sector Wins with EV Volume’, highlighting the urgent need for increased electric vehicle (EV) uptake to sustain industry growth and meet the UK’s net zero targets.
The report revealed that EV demand has surged tenfold in five years, from 37,850 buyers in 2020 to 381,970 in 2024. However, current market forecasts indicate that only 23.1% of new car buyers will opt for an EV within the next three years, falling short of the government’s 28% target for 2025.
SMMT warned that failing to boost demand could lead to a shrinking market, negatively impacting manufacturers and multiple connected industries.
The report emphasised that the EV market does not operate in isolation, supporting supply chains, charging networks, electricity providers, and vehicle maintenance services.
It estimated that with adequate Government support, the UK could see a 15% increase in zero-emission car uptake beyond current projections. This could put more than two million EVs on the road over three years, reducing CO2 emissions by over six megatonnes annually—equivalent to one-sixth of the UK’s annual aviation emissions.
Public charging networks and electricity suppliers were identified as key stakeholders benefiting from higher EV adoption. Increased EV volumes would drive investment in public chargers, home and depot charging stations, and smart grid technologies. Additionally, stronger EV demand would encourage further investment in battery production, vehicle insurance, and maintenance services.
The report outlined a stark contrast between a thriving and struggling EV market. A high-volume market would foster investment and reduce costs, while a stagnant market could slow decarbonisation efforts, weaken infrastructure growth, and discourage manufacturers from investing in new EV models.
SMMT proposed several measures to stimulate EV demand, including a three-year VAT reduction on new EV purchases, equalising VAT on public charging with home electricity rates, and revising vehicle taxation policies that currently penalise high-cost EVs. It also called for accelerated public charging infrastructure development to instill consumer confidence.
SMMT Chief Executive Mike Hawes said: “Prioritising volume will deliver economic growth for all stakeholders. It also means greater and faster decarbonisation – the entire point of this transition.”
The report concluded that the UK must focus on increasing EV volumes rather than simply meeting percentage-based targets. By implementing consumer incentives and regulatory support, the country could achieve a larger, more sustainable EV market, ensuring economic and environmental benefits for all sectors involved.
