UK New Car Market Achieves Record High in 2024, But Falls Short of Government Targets for Electric Vehicles

The UK new car market has seen significant growth in 2024, with record numbers of electric cars being sold. According to figures from the Society of Motor Manufacturers and Traders (SMMT), electric cars accounted for 19.6% of all new car sales, but fell short of the government’s 22% target set in the Zero Emissions Vehicles (ZEV) Mandate.

Car makers that do not meet these targets face fines of up to £15,000 per non-compliant vehicle, but there are mechanisms in place to help offset penalties, such as a credit-trading system or offsetting against overall CO2 emissions.

While private buyer registrations for electric cars saw a decline, the government pointed out that official figures do not include private lease contracts, ex-demo, and salary sacrifice cars, which will be registered as business purchases even though they are used by private motorists.

The industry has made efforts to achieve the ZEV mandate target, with manufacturer discounting totaling over £4.5 billion in 2024. However, the SMMT warns that this level of discounting is not sustainable in the long term.

The best-selling cars in December 2024 were the Tesla Model Y and Model 3, with Tesla not having to meet targets as it is 100% electric. Petrol remained the most popular powertrain among buyers, followed by hybrid electric vehicles (HEVs).

Overall, there are now a record 132 zero-emission models available in the UK market, up 38% since 2023. Business and fleet registrations for electric cars saw a significant increase, demonstrating the effectiveness of tax incentives for non-private buyers.

Looking ahead to 2025, meeting the mandate thresholds will be even more challenging, with the target now set at 28%, requiring a significant uplift in the EV market.

In conclusion, while the UK new car market has seen growth in electric car sales, there are still challenges to meet government targets. The industry is working towards achieving these goals, but sustainable solutions will be needed to ensure long-term success in the electric vehicle market.