British new car sales soared to the highest in February in 20 years, boosted by businesses buying electric vehicles for their own fleets, despite a decline in private EV adoption.
According to the Society of Motor Manufacturers and Traders (SMMT), the number of new car registrations last month rose 14% from the previous year to 84,886, the highest performance for February since 2004.
This was the 19th consecutive month of growth, primarily due to corporate fleets investing in newer vehicles. February is traditionally the slowest month of the year, with buyers often choosing to wait until March for new license plates.
Electric vehicles recorded strong growth, with sales of hybrid electric vehicles increasing by 12.1%, but market share decreased slightly to 12.7%. Plug-in hybrids recorded the biggest increase in the month, increasing by 29.1% to reach his 7.2% of the market. Battery electric vehicles (BEVs) also outperformed other markets, increasing by 21.8% to account for 17.7% of registrations.
SMMT said the long-term situation will become clearer in March, the busiest month for car sales.
The increase in EV adoption is entirely driven by financial incentives, but private buyers account for less than a fifth (18.2%) of new BEVs sold so far this year.
Many consumers are concerned about the cost of electric cars, battery life and the availability of charging points. Last month, a House of Lords committee called on ministers to intervene to boost the used EV market and ease “uncertainty and concern” about the health of vehicle batteries. Members of the Environment and Climate Change Committee called on the government to step up efforts to promote the spread of EVs.
SMMT said a faster transition depends on more private buyers switching, but a lack of significant incentives is deterring many buyers. In addition, Wednesday’s Budget will help the Chancellor slash demand by halving the value added tax on new EVs over three years, amending proposed changes to the car excise tax, and lowering the value added tax on public charging in line with home charging. He added that it was an exciting opportunity.
Consumers do not pay VAT on other emissions-reducing technologies such as heat pumps and solar panels, but private EV buyers pay VAT on all vehicles, whether electric, gasoline or diesel. I have paid the full amount of the 20% levy. SMMT says halving VAT on new EV purchases would save the average buyer around £4,000 on the upfront purchase price, but would cost the Treasury more than the plug-in car subsidy, which is due to end in 2022. He claimed it would be less.
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Additionally, next year’s changes to car excise duty will mean that the majority of battery-powered electric car buyers will effectively pay £1,950 for moving to an electric car due to the ‘expensive car’ surcharge. will be fined.
People who cannot charge their BEV at home will pay a 20% value added tax (VAT) “pavement penalty” for public charging. That’s four times the price she pays for someone who can charge at home.
Mike Hawes, CEO of SMMT, said: “The growth potential of the new car market continues to be the best February in 20 years, and this week’s Budget presents an opportunity to ensure greener growth. “It will be.”
“As the market enters its busiest month of the year, tackling the triple tax wall will boost demand for EVs, reduce carbon emissions and boost the economy. A fair transition to zero emissions will be achieved and the UK’s EV ambitions will once again receive a boost.”
