New car sales fell by 6 per cent in October, marking only the second time registrations have gone into reverse this year.
Petrol and diesel deliveries were both down significantly, while electric vehicles (EVs) were the only fuel type to see an increase in demand – a strong sign that ongoing market manipulation to encourage people to buy electric cars is working.
With the Budget confirming the 2030 ban on new petrol and diesel cars has been reinstated and manufacturers facing increase EV sales targets each year until then, the market is facing mounting pressure to hit government sales numbers.
UK new car sales fell by six per cent in October, the second time the new car market has shrunk this year
In October, businesses, fleet and private buyers registered 144,288 new passenger cars, the latest figures from the Society of Motor Manufacturers and Traders (SMMT) show – which is down on the same month in 2023.
The monthly decline in the total market value was equivalent to a hefty £350million loss in turnover.
This was partially triggered by a decline in fleet sales, which slipped by 1.7 per cent year-on-year – only the second fall in this market this year – while low-volume business registrations also fell by a more significant 12.8 per cent.
Year to date petrol sales are down 1.8%, while this time last year saw 84,742 new petrol cars sold, compared to 72,681 last month – a drop of 14.2%. Hybrid and plug-in hybrid sales also fell in October, down 1.6% and 3.2% respectively
While the rest of the new car market saw declines, registrations of EVs rose by a quarter. The trade body put this down to a wider choice of new battery cars
Petrol, diesel, hybrid sales fall – only EV demand grew
With the end of the year drawing closer and government EV sales targets – and fines for not meeting them – looming, the new car market in October hints at manufacturers pushing their electric vehicles much harder.
The month saw double-digit drops for both petrol and diesel deliveries, which is likely due to market tactics aimed at increasing sales to hit the Zero Emission Vehicle Mandate targets, required mainstream brands to up their share of EV sales to 22 per cent by the end of 2024.
As such, registrations of petrol cars shrank by 14.2 per cent, while diesel – which has been in freefall since 2015- dropped by 20.5 per cent.
Year to date petrol sales are now down 1.8 per cent (though still make up more than half of the new car market), while diesel has dropped back 12.8 per cent.
Hybrid and plug-in hybrid sales also fell in October, down 1.6 per cent and 3.2 per cent respectively, having seen big jumps in demand throughout this year.
EVs are the only fuel type to see growth, up almost a quarter (24.5 per cent) in October, snagging a fifth (20.7 per cent) of market share.
Experts say a raft of new electric models entering the market has helped stimulate demand, with new car buyers now able to choose between more than 125 different EV models.
This is a huge 38 per cent uplift in new EV availability in the UK in just the last 10 months.
While it remains the case that the average EV has a higher upfront cost than an internal combustion engine equivalent, widening choice and huge manufacturer discounting mean that around one in five BEV models now has a lower purchase price than the average petrol or diesel car, especially for buyers able to take advantage of schemes such as salary sacrifice.
Mike Hawes, SMMT chief executive, said, ‘Massive manufacturer investment in model choice and market support is helping make the UK the second largest EV market in Europe.’
Explaining why October had been so good to EVs, Mike Hawes, SMMT chief executive, said: ‘Massive manufacturer investment in model choice and market support is helping make the UK the second largest EV market in Europe’
EV challenges ahead for industry
While the EV market increase will be welcomed by ministers, behind the top line figures there’s a major challenge ahead for the industry.
While almost 300,000 new BEVs have reached the road in 2024, this represents 18.1 per cent of the market – an increase on 2023.
Yet this is still significantly short of the 22 per cent target for this year – and of the 28 per cent which must be achieved in 2025 – under the Vehicle Emissions Trading Scheme.
Hawes said: ‘Fleet renewal across the market remains the quickest way to decarbonise, so diminishing overall uptake is not good news for the economy, for investment or for the environment.
‘EVs already work for many people and businesses, but to shift the entire market at the pace demanded requires significant intervention on incentives, infrastructure and regulation.’
The ZEV mandate requires mainstream car makers to increase their share of EV sales each year until the ban on new petrol and diesel models. The minimum requirement to avoid fines in 2024 is 22%, rising to 28% next year and 33% in 2026
While the Budget extended existing business and fleet incentives for EVs, the Vehicle Excise Duty and Company Car Tax changes disincentivise low carbon vehicle purchases and fleet renewal generally, risking a delay to the overall reduction in road transport emissions.
Ian Plummer, commercial director of Auto Trader, commented: ‘Manufacturers are making significant efforts to bridge the price gap to electrics – as shown by the 12 per cent discounts on Auto Trader’s site in October – but the market is still not achieving the volumes needed.
‘With the reinstated 2030 ban date on the sale of new petrol and diesels vehicles looming, we urgently need to make the positive case for EVs to ensure a broader healthy new car market.’
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.