Autmotive News Europe — 2024-10-04
Automotive Industry
Automakers are on course to offer at least £2 bn ($2.6 bn) in electric-vehicle discounts this year and still fall short of the UK government's sales mandate, according to the SMMT, the industry's trade body.
Steep price cuts helped to lift battery-electric vehicle registrations by 25% in September in an overall market where sales increased just 1.1% from a year ago.
BEVs accounted for 20.5% of total sales in September and 17.8% of all registrations in the first nine months. The SMMT estimates that around 18.5% of cars sold this year will be BEVs. The government has set a target for BEVs to have a 22% market share in 2024.
"Despite manufacturers spending billions on both product and market support — support that the industry cannot sustain indefinitely — market weakness is putting environmental ambitions at risk and jeopardizing future investment," said Mike Hawes, SMMT's chief executive officer.
The comments were made in an open letter to finance minister Rachel Reeves ahead of the Oct. 30 autumn budget. The letter was signed by the SMMT and UK heads of several automakers including Stellantis, Volkswagen and Nissan.
"As an industry, we will likely miss those targets and a significant number of brands face the prospect of either buying credits from another company or paying swingeing compliance payments," the letter said.
Hawes reiterated his calls for value added tax on new BEV purchases to be halved to 10% for three years for private customers and for VAT to be reduced on public charging. He pointed to the growth in adoption by the fleet sector as proof that incentivization works. Currently, tax benefits are only applicable on commercial purchases.
The SMMT is echoing concerns that automakers including Stellantis and Ford have raised about the UK trying to hasten the phase-out of combustion engines while scaling back government incentives.
Stellantis, which owns the UK's Vauxhall brand, in June warned it could halt its British production unless the government does more to boost EV demand.
Automakers face fines of as much as £15,000 per vehicle if they fail to comply with the mandate, though they can avoid penalties by buying credits from overachieving manufacturers. Britain plans to end sales of new gasoline and diesel cars from 2030.
The pullback of subsidies in several markets across Europe has contributed to a slump in EV demand and profit warnings from Stellantis, Volkswagen, BMW and Mercedes-Benz.