With record numbers of EVs on the road and one now sold every minute, are problems caused by the pandemic finally over, and what is next for fleets?
The UK car market recorded a year of non-stop recovery at the end of July 2023, with fleets providing the main growth of 28% in the month.
The figures, reported by the Society of Motor Manufacturers and Traders (SMMT), show that after the seismic impact of Covid, the car market is finally returning to normal, with supply of vehicles more plentiful, and the shortages of semi-conductors less severe.
Despite the encouraging figures, which saw uptake by large fleets increase to 61.9% at 80,961 units, and private demand stay stable at around 60,000 sales, the SMMT noted that sales are still below pre-pandemic levels.
Major growth came in electric vehicles which accounted for more than a third (35.4%) of the market, with pure electric (as opposed to hybrids) the strongest sector with an 87.9% increase in July to take an overall share of 16% of new registrations.
The SMMT said the demand for battery electric cars was such that a new one was registered every 60 seconds in the month, and predicted that this will accelerate to one every 50 seconds by the end of the year, and up to one every 40 seconds by the end of 2024.
While sales are on an upward curve, the SMMT said the electric vehicle sector must move even faster still if it is to enable the UK to meet “ambitious but necessary” environmental targets, especially in the area of charging infrastructure.
There were positive signs of this happening over the last quarter, it said, as a record high of 3,056 new standard public chargers were installed, and claimed it was equal to one new charger for every 35 new plug-in vehicles registered, calling it a “significant improvement” on the same quarter last year, when the ratio was one for every 58 cars.
Philip Nothard, insight and strategy director at automotive services organisation Cox Automotive, said in the firm’s latest New Car Forecast that he also believed the recovery of recent months will continue, powered by opportunities in electrification. He added: “The new car market is going through arguably its most significant change in decades, an evolution driven by electrification, new players entering the arena and changes to how new cars are sold.
“This sector has faced numerous challenges over the past three years and the shoots of recovery that it showed at the beginning of the year will, we think, characterise what remains of these 12 months.”
“The industry must adapt and align its strategies to meet the demands of an evolving market. With electrification serving as a driving force, the challenges and opportunities in this transition period will shape the future landscape of the automotive industry.”
Looking at the numbers and growth, analysts CAP said in its Car Future Editorial it expects electric to be the dominant powertrain in four years’ time. It said: “Growth will continue to be led by battery electric vehicles (BEVs) which became the dominant alternative fuel type towards the end of 2022 as we expected and is forecast to be the largest fuel type in the market by the end of 2027.
“Post-Covid driving patterns (shorter and fewer journeys due to the increase of home working and online meetings) are likely to add to demand. The government’s proposal to ban new ICE cars from 2030 will also be part of this increase, provided enough vehicle supply is made available and investment in charging infrastructure keeps pace with demand.”
The number of diesel (and mild hybrid diesel) cars sold continues to fall, with only 86,469 registered this year, compared to 97,188 during the same period in 2022, according to the SMMT. To give an indication of the disparity, overall petrol (including mild hybrid) sales in 2023 so far total 621,346.
Diesel vans are still going strong though, with the number of UK light commercial vehicles (LCV) registered in the UK growing for the seventh consecutive month in July, to a 2023 total of 196,916. Up 20% on 2022, diesel took a 92.5% share of the volume.
While electric van sales lag behind those of cars, there is still growth with more than 10,000 sold, up 16% on 2022 to a 5.4% share.
Mike Hawes said: “The challenge now is to deliver even greater EV uptake, which requires urgent action to reduce soaring energy costs and increase the provision of dedicated van charging infrastructure to bolster operator confidence and meet the unique needs of this sector.”
The UK car industry has by no means solved all the issues created by Covid, but these figures show it is on the road to recovery. If fleets held on to cars and vans longer due to supply shortages, it seems likely they may now be able to replace them, and businesses can plan for a future that will be increasingly powered by electric. This equally presents some challenges for fleet managers, with drivers charging on-the-road and for those that have employees charging at home, how do they pay for that outside of their domestic energy use?
At Allstar, we’ve been doing the groundwork to support this change and have a solution to help take the hassle out of paying for electric charging at home. Allstar Homecharge accurately pays a driver’s energy supplier directly each month for the cost of charging their electric vehicle at home.
To find out more about Allstar Homecharge and our on-the-road solution, Allstar One Electric, contact us to find out how they could benefit your business and help you on the journey to an electric fleet.