Following a decline in April, UK new car registrations saw an uptick in May, with sales climbing by 29,739 units, which represented a slight 1.6% year-on-year rise, says David Borland (EY UK & Ireland Automotive Leader).
May’s increase is a welcome boost in the context of challenging market conditions facing UK automotive companies, with continued global trade uncertainty adding a further layer of complexity in the global industry, he said.
Notably, Battery Electric Vehicle (BEV) sales have represented a consistent source of growth for the sector in recent months, which continued in May with a significant 25.8% year-on-year increase, as the shift towards cleaner and greener powertrain technologies continues.
However, the Zero Emissions Vehicle (ZEV) Mandate is still the elephant in the room, with BEV market share for this year to date currently standing at 21.8%, which remains some way behind the 28% required for compliance, Borland said.
“Conversely, Internal Combustion Engine (ICE) vehicle sales continue to fall, with petrol (-12.5%) and diesel (-15.5%) both down year-on-year in May – a trend that is expected to continue as the year progresses as a lever for meeting the ZEV mandate by reducing overall volumes,” he said.
“Sales of Plug-in Hybrid Electric Vehicles (PHEVs) are reportedly expected to increase significantly over the coming years following the recent softening of ZEV Mandate legislation. Indeed, PHEV sales rose once again last month with a considerable 50.8% year-on-year uptick, as they continue to represent a compelling alternative powertrain technology. Meanwhile, hybrid sales increased by a more modest 6.8%. ”
UK consumers likely to hold off on big purchases
An uncertain economic outlook for the UK could prompt consumers to delay major spending decisions, but the latest data bucks the recent trend of a slowdown for new car registrations, said Maria Bengtsson (EY UK & Ireland Mobility Leader).
Despite this, against the ongoing challenging backdrop, the need for automakers and dealers to be both resilient and agile is as important as ever, while the right support from policymakers will be equally crucial, she said.
“How can automakers compel consumers to make the switch to a BEV? How can businesses and the Government educate consumers on the benefits of owning a BEV? How can automakers continue to scale up innovation, variety and quality of new electric vehicles while keeping costs manageable?
“These are all critical questions for the automotive industry going forward, with the answers not yet entirely clear. Seeking out the right advice, prioritising forward planning and lobbying key policymakers will be crucial,” she said.
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