September new car registrations have hit their lowest level in over two decades as a result of the pandemic, but electric vehicle sales are at least on the rise.

Uptake of fully electric and plug-in hybrid cars grew substantially to account for more than one in 10 registrations

Putting paid to hopes that the all-important plate change month would bring some much-needed positive news, total new car registrations fell 4.4% to 328,041 units – the lowest September volume recorded since 1999, when the current dual-plate system came into force, and some 15.8% lower than the 10-year average of around 390,000 units for the month.

The data from the Society of Motor Manufacturers and Traders (SMMT) shows that while private registrations played a role in the decline – falling 1.1% – a larger 5.8% downturn in fleet demand took its toll. And a much larger 31.9% downturn was seen in the ‘Business’ registrations category for fleets operating 24 vehicles or less.

The year-to-date figures also lay bare the impact of the pandemic. Total registrations for the first nine months of the year fell 33.2% to 1,243,656 units, with private registrations down 28.9%, fleet registrations down 36.2% and business registrations down 46.8%.

More positive news for September came in the form of registrations for fully electric and plug-in hybrid cars, which grew substantially to account for more than one in 10 registrations. Demand for fully electric vehicles increased by 184.3% compared with September last year, with the month accounting for a third of all 2020’s BEV registrations. But the SMMT continues to warn that it’s not high enough growth to put the market on track with government plans to eliminate ICE cars from sales, potentially from 2030.

The SMMT also highlighed that alongside Covid, the market is facing continued pressure, from Brexit uncertainty and the threat of tariffs.

Chief executive Mike Hawes said: “During a torrid year, the automotive industry has demonstrated incredible resilience, but this is not a recovery. Despite the boost of a new registration plate, new model introductions and attractive offers, this is still the poorest September since the two-plate system was introduced in 1999. Unless the pandemic is controlled and economy-wide consumer and business confidence rebuilt, the short-term future looks very challenging indeed.”

Commenting on the figures, Lesx Autolease said the ongoing rise in EVs was heartening. Head of consultancy Ashley Barnett added: “Upfront barriers including vehicle choice and range anxiety along with an improving infrastructure are all contributing to the transition. If anything, home working and shorter commutes are likely to increase appetite for alternatively fuelled vehicles even more. However, we shouldn’t take our eye off the ball – we’ve still got a long way to go with the total number of EVs on the UK’s roads still only accounting for 0.45% of vehicles.”

Deloitte has also said that one further positive could come in the form of fewer pre-registrations than we’d see in a normal September.

Michael Woodward, UK automotive lead, said: “While sales typically attributed to pre-registration activity may filter through to the final quarter, the wider knock-on effect on residuals and the used car market remains to be seen. Dealers see pre-registered cars as a way of bolstering used car stocks, and a lack of activity in this space may drive prices up.

“The reduction in pre-registrations is good for OEMs and leasing companies. It keeps new car prices high and hence the residual price of the used car when it comes back. This anticipated strengthening of residuals could allow leasing companies to reduce monthly lease costs or improve their profitability.”