UK new car registrations surged 14.0% in February to 84,886 units, recording the best performance for the month since 2004.

February’s performance was entirely boosted by fleet investments

Traditionally a low-volume, pre-new number plate month, February’s performance was entirely boosted by fleet investments. Larger fleet registrations rose 25.2% while smaller, ‘business’ registrations to fleets with fewer than 25 vehicles grew 15.5%. Combined, it means fleet registrations surged 24.9% and accounted for two-thirds (66.3%) of the new car market, according to the new figures from the Society of Motor Manufacturers and Traders (SMMT). Private uptake continued to struggle, with a 2.6% decline to record a 33.7% market share.

Demand for electric vehicles actually outperformed the overall market rise and showed continued growth during the first year of mandated targets for manufacturers. Plug-in hybrids (PHEVs) recorded the largest proportional growth for the month, rising 29.1% to reach 7.2% of the market. Battery electric vehicle uptake similarly outpaced the rest of the market, rising 21.8% to account for 17.7% of registrations, an improvement on last year’s 16.5% and showing progress towards carmakers’ goal of a 22% share under the ZEV mandate. Hybrid electric vehicles (HEVs) rose 12.1%, but took a marginally smaller year-on-year market share of 12.7%.

While the overall figures and demand for electric vehicles were positive, the SMMT and many others have warned that fleets continue to drive growth. The industry continues to call for fairer EV taxation as private EV uptake declines. Private buyers accounted for fewer than one in five (18.2%) new BEVs registered in 2024 so far.

The SMMT renewed its call for the Chancellor to use tomorrow’s Budget to stimulate demand by halving VAT on new EVs for three years, amending proposed Vehicle Excise Duty (VED) changes, and reducing VAT on public charging in line with home charging.

Mike Hawes, SMMT chief executive, said: “The new car market’s ability to deliver growth continues with its best February for 20 years and this week’s Budget is an opportunity to ensure that growth is greener. Tackling the triple tax barrier as the market embarks on its busiest month of the year would boost EV demand, cutting carbon emissions and energising the economy. It will deliver a faster and fairer zero emission transition, putting Britain’s EV ambition back in the fast lane.”

EV take-up ‘heavily skewed by fleet figures whilst private demand wanes’

The SMMT’s call for action on consumer incentives has been echoed by many across the automotive sector.

Lisa Watson, director of sales at Close Brothers Motor Finance, warned that EV take-up remains heavily skewed by fleet figures whilst private demand wanes.

“According to our research, only 12% of buyers are planning to purchase an electric car – down from 14% last year. The introduction of aggressively priced Chinese electric vehicle brands such as BYD and GWM may disrupt large manufacturers, and could make EVs more appealing to private buyers.

“Both consumers and manufacturers will be hoping that the Government’s Spring Statement will address concerns surrounding EV uptake, such as inadequate infrastructure, and contain incentives to encourage widespread EV adoption.”

Jon Lawes, managing director at Novuna Vehicle Solutions, said: “With UK policymakers reportedly considering their own probe into Chinese EVs, the Government needs to urgently demonstrate a clear path to widespread EV adoption.

“Competition concerns are understandable, but we must not lose sight of the big picture. High prices are stalling EV sales to consumers and threaten to delay the transition. Without fresh EV support in the Budget this week, trade restrictions will be a difficult sell to consumers.”

And Deloitte has warned that some manufacturers are starting to lag behind their ZEV mandate targets, which require at least 22% of new cars to be zero-emission in 2024.

Jamie Hamilton, automotive partner and head of electric vehicles, said: “To sustain growth in the market there needs to be a holistic approach to incentives for new and used cars, as well as charging infrastructure.

“Our surveys show the lack of charging infrastructure and affordability of new EVs remain the top concerns for consumers – with 71% expecting to spend less than £30k for a new or used EV.

“We should be seeing a wider and more affordable range of EV models coming to the UK market in the year ahead, including those offered by new brands which should help drive growth in the sector.”

EY meanwhile warned of the impact of predominant fleet demand for EVs on vehicle profiles for the used car market.

David Borland, EY UK & Ireland automotive leader, said: “Fleet sales into corporates and their employees typically see a skew towards premium models which are then defleeted into the used car market and are often unaffordable to many consumers – which has been one contributing factor to used BEV price dynamics recently. As such, a sustainable recovery in the retail new car registrations segment is needed for the UK to be confident of realistically hitting the emissions-related targets now in place.”