UK EV sales hit record high but fall short of government target

The UK automotive industry achieved a record-breaking year for fully electric vehicle sales in 2024. However, electric cars accounted for just 19.6% of total new car sales despite the milestone, falling short of the government-mandated target of 22%, according to the Society of Motor Manufacturers and Traders (SMMT).

While the sales figure of 328,000 units marks significant growth, it highlights the challenge facing automakers in the UK to meet the nation’s increasingly stringent quotas.

Rising to 28% this year, the gap remains substantial. It raises questions about the viability of the UK’s EV transition goals, particularly as incentives diminish and consumer demand remains a worry – like elsewhere in Europe.

Record year

The surge in electric car sales represents a whopping 60% year-on-year increase in December alone, with nearly 44,000 battery-powered vehicles registered in the month.

December’s figures pushed the monthly market share of EVs to 31%, the highest in two years. Yet, the 19.6% market share fell short of expectations for the year as a whole.

Mike Hawes, CEO of the SMMT, acknowledged the progress but warned that the wide discounts underpinning the witnessed growth are “unsustainable.”

He called for “urgent and substantial” government support to stimulate consumer demand for EVs. He added that without intervention, the industry’s investments, jobs, and ambitions for carbon neutrality could be at risk.

The role of incentives remains vital as consumer interest has been particularly sluggish among private U.K. buyers, with just one in ten opting for an electric driveline in 2024. So, like in Belgium, business and fleet customers accounted for most of the demand.

Industry response

Despite missing the 2024 target, automakers have avoided fines of up to £15,000 per vehicle. An official mechanism offering some flexibility allows car makers to offset shortfalls with credits or exceed targets in future years. However, critics argue that such provisions risk undermining the urgency of the transition to electric drivelines.

The EV mandate in the UK has also prompted broader industry concerns. Stellantis, the parent company of Vauxhall, cited the country’s strict regulations as a factor in its decision to end van production at its Luton plant after 120 years.

The announcement sent shockwaves through the sector, highlighting the potential for job losses as manufacturers adapt to regulatory demands.

Meanwhile, the Labour government, elected in July, has revived plans to bring forward a ban on petrol and diesel car sales to 2030, reversing the Conservative government’s decision to delay it to 2035.

With some voices praising the commitment to climate goals, others fear it will place additional strain on an already pressured industry. The government has launched consultations to address industry concerns, including determining which hybrid models can be sold alongside zero-emission vehicles between 2030 and 2035.

Efforts are still very much needed to determine whether 2024’s record sales in the UK mark a turning point or a peak.