In July, the United Kingdom witnessed a remarkable surge in its automotive market as a new battery electric car was sold every 60 seconds, according to the industry body, the Society of Motor Manufacturers and Traders (SMMT). The robust sales of electric vehicles (EVs) have been driving the country’s automotive industry, leading to an optimistic outlook for the sector. However, the SMMT has trimmed its growth forecast for next year by 0.7% to 1.951 million units, citing concerns over the cost of living.
British inflation, which peaked at 11.1% in October last year, has been a point of concern, although it has been easing at a slower pace compared to other developed economies. The escalating cost of living, coupled with the impending zero-emission vehicle mandate set to come into effect next year, has led the SMMT Chief Executive, Mike Hawes, to emphasize the need to provide consumers with ample incentives to adopt electric vehicles.
The UK government’s proposal of a zero-emission vehicle target, requiring manufacturers to achieve 22% of their car sales through battery electric vehicles from next year onwards, is expected to drive the adoption of EVs even further.
The recent growth in the automotive market has been driven by the alleviation of supply chain disruptions, which has resulted in increased production and deliveries in July, as per the SMMT. However, the industry body highlights that the pace of electric vehicle adoption needs to accelerate further to outpace conventional vehicle sales and meet ambitious environmental targets.
The SMMT predicts that battery electric vehicles will claim a 22.6% market share in 2024, following an impressive nearly 88% surge in deliveries in July. As more EV models from various brands enter the UK market, including offerings from new manufacturers, there is hope that consumers currently using petrol and diesel cars may be encouraged to make the switch to electric.
Despite the encouraging growth with a 28% increase in registrations, reaching 143,921 units last month, the overall automotive market is yet to return to pre-pandemic levels this year. In a previous statement, the SMMT suggested that it might take around five more years for Britain to regain its capacity to produce 1 million or more cars annually.
The focus on electric vehicles and the push for environmental targets signal a transformative shift in the UK’s automotive landscape. As the market continues to evolve, stakeholders will need to navigate the challenges posed by inflation and cost-of-living concerns while creating an ecosystem that fosters greater electric vehicle adoption.
