Although the UK experienced record electric vehicle sales in 2024, this also came at a considerable cost, in the form of steep manufacturer discounts.
The UK bagged Europe’s top electric vehicle (EV) market spot for the first time. This was following soaring EV sales as net zero laws tightened in the UK.
Approximately 381,970 battery electric vehicles (BEVs) were sold in the UK in 2024, according to The Society of Motor Manufacturers and Traders Ltd (SMMT). This was a surge of 21.4% on an annual basis.
Hybrid electric vehicle sales also rose 9.6% to 261,398 units last year, with plug-in hybrid vehicle sales rising 18.3% to 167,178 units in 2024.
However, despite higher UK sales compared to 2023, battery electric vehicles only accounted for 19.6% of the car market last year, which still missed the 22% target set by the government.
One of the major factors driving more UK EV sales was more discounts being offered by electric vehicle makers, following the UK government implementing stricter EV sales targets and mandates. This included the zero emission vehicle (ZEV) mandate which came into force in January 2024.
The ZEV prescribed that 22% of all new car sales needed to be electric vehicles in 2024, while also implementing a steep fine of £15,000 for every internal combustion engine (ICE) car sold above a certain limit.
This also included hybrid cars. In 2025, this target is expected to rise to 28% of all new vehicle sales.
This mandate led to several car manufacturers announcing significant discounts in an attempt to meet the required sales targets. However, there have also been increasing concerns that this rate of discounting is unsustainable in the long run.
The UK government also revealed that it was planning to impose the diesel and petrol car ban by 2030, instead of by 2035, as previously expected, although some hybrid vehicles may still be exempted until 2035.
In 2024, the UK marginally outsold Germany in terms of electric vehicle sales, with the latter facing a number of subsidy changes and strategic delays, which contributed significantly to dampened sales.
Can the UK’s EV boom be maintained?
Car makers shelled out about £4.5bn (€5.42bn) in discounts in 2024, according to the SMMT, coming up to a nearly £12,000 (€14,455.62) price cut per electric vehicle.
Several major car companies such as BMW, Mercedes-Benz, Honda, Stellantis, Ford and Jaguar Land Rover have already expressed concerns that this level of discounts cannot be sustained in the long run.
There have also been concerns about manufacturers having to close down factories, lay off workers or cut costs in other ways, if these discounts continue. Car companies have also highlighted that the higher EV sales mostly arise from fleet and company sales, with demand from individual consumers still being weak.
In an open letter to the UK Chancellor in October 2024, the SMMT, along with 12 car companies called for more consumer incentives to buy electric vehicles.
The letter said: “As the biggest carbon emitting sector, decarbonising road transport is fundamental. This was the logic behind the last government’s introduction of a zero emission vehicle (ZEV) mandate, to compel the sale of electric vehicles to UK consumers.
ADVERTISEMENT“But mandates don’t make markets and consumers respond to carrots not sticks. Unfortunately, the private consumer has no fiscal incentive to switch and so our ZEV market looks set to miss its target. The consequences of this will not just be environmental but economic.”
Mike Hawes, the chief executive officer (CEO) of SMMT, also said on the association’s website: “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.
“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 – else automotive investments will be at risk and the jobs, economic growth and net zero ambitions we all share in jeopardy.”
Source: Euro News
