Published on August 6th, 2019 | by Steve Hanley0
New Car Sales In UK Falter As BEV Sales Soar
August 6th, 2019 by Steve Hanley
Far be it from me to explain Brexit. To an outsider, it looks a lot like a self-inflicted gunshot wound that many in the populace are proud of. Sort of a red badge of courage, as it were. Certainly the impact on the UK economy has been dramatic, with both Honda and Ford closing manufacturing facilities recently.
Uncertainty is the enemy of stable markets, as evidenced by the latest economic news which shows new car sales in the UK are the lowest they have been since 2012. The auto sector is a vital component of any modern economy. For every job in making cars, up to 10 more are created in supporting industries such as sales, insurance, repair, maintenance, and transportation. When the auto sector is off, it drags the rest of the economy down with it.
The Society of Motor Manufacturing and Traders says that in July, the UK new car market was down a whopping 4.1%. The decline is largely due to fewer diesel-powered cars being sold. Diesel sales have been trending down for the past 28 months. In July, they were off by a further 22%.
But there is good news among the gloom. Sales of battery electric cars are up strongly, according to a report by Climate Action. Mike Hawes, CEO of SMMT, says, “Despite yet another month of decline in the new car market, it’s encouraging to see substantial growth in zero emission vehicles. Thanks to manufacturers’ investment in these new technologies over many years, these cars are coming to market in greater numbers than ever before.”
Sales of new fully electric cars were up 158% in July compared with a year ago. 2,271 battery electric cars were registered in July 2019, compared with 880 in July 2018. That means battery cars represented a 1.4% share of the total new car market last month, the highest ever share recorded in any month for electric vehicles, says Business Green.
The government is struggling to find the right mix of incentives to promote the sale of vehicles with lower exhaust emissions. Last October, it reduced EV subsidies by £1,000 and disqualified a number of plug-in hybrid models from receiving subsidies altogether. Not surprisingly, hybrid sales have declined markedly since then.
Mike Hawes says that rising sales of electric cars is welcome news, but the government needs to do more to promote the transition to electric automobiles. “If the UK is to meet its environmental ambitions, however, government must create the right conditions to drive uptake, including long-term incentives and investment in infrastructure. The fastest way to address air quality concerns is through fleet renewal so buyers need to be given the confidence to invest in the new, cleaner vehicles that best suit their driving needs, regardless of how they are powered.”
Daniel Brown, head of the Renewable Energy Association, agrees. “Whilst this surge in battery electric vehicle deployment is positive, with registrations now at 1.4 per cent of new car sales there is still a long way to go to achieve the Prime Minister’s vision for the UK to ‘be the home of electric vehicles’ and the government’s targets for every new car and van to be effectively zero emission by 2040. Continued and clear policy support now and into the mid-2020s will be central to this.”
Note the words “clear policy support.” Subjecting the marketplace to an unending procession of changes to incentives is a sure way to dampen enthusiasm for electric cars altogether. But given the recent turmoil in the UK government, such clarity seems unlikely.