United Kingdom’s automotive industry body has just reduced both its overall car and electric vehicle sales forecast for the year on Monday primarily due to waning private retail demand, Reuters reported.
SMMT cuts sales targets amid EV slowdown
The Society of Motor Manufacturers and Traders (SMMT) projects new car sales to record 1.97 million units in the UK in 2024, representing a notable decline from the prior forecast of 1.98 million units.
In addition, the SMMT originally expected all-electric vehicles (BEVs) to account for almost 20% of the overall market in 2024. However, it now reduced that figure to only 18.5%.
These sales forecast adjustments are apparently due to the weak demand from private buyers.
Economic concerns and rising costs impact EV purchases
The SMMT’s Chief Executive Mike Hawes explained that waning electric vehicle demand from private customers remains an “overriding concern” for the domestic automotive industry despite electric automakers’ “generous” discounts.
Economic concerns and increasing costs continue to have a huge impact on electric vehicle purchases as customers become more mindful about their spending. EVs’ high upfront cost and uncertainties about future economic conditions have resulted in declining demand.
While it is true that more people are now open to EVs, the transition remains slow based on the UK’s ambitious climate targets.
“More people than ever are buying and driving EVs but we still need the pace of change to quicken, or else the UK’s climate change ambitions are threatened and manufacturers’ ability to hit regulated EV targets are at risk.”
SMMT Chief Executive Mike Hawes
For context, the UK requires all auto brands to report at least 22% zero-emission vehicle share in their overall volume in FY 2024. It will further increase to 80% by 2030.
“With zero emission vehicles mandated to comprise a minimum 22% of each brand’s new car registrations over the full year, the pace of transition needs to increase significantly.”
SMMT
SMMT calls for government support to boost EV adoption
The SMMT recently called for the UK government to reduce taxes on electric vehicles to encourage customers to buy them, thus reversing the downward trend.
“Achieving market transition at the pace demanded requires greater support for consumers and, with the all-important new number plate month of September beckoning, action on incentives and infrastructure is needed now.”
SMMT Chief Executive Mike Hawes
Apart from electric automakers’ customer discounts, the UK government must also show significant support for the shift to electric mobility through incentives and charging infrastructure development. Without these, both the UK and automakers will fall short of the targets set under the zero-emission vehicle (ZEV) mandate.
