UK new car sales fall for second time in 2024 – EY comments

David Borland, EY UK & Ireland Automotive Leader, comments on the Society of Motor Manufacturers and Traders (SMMT) new car registration figures for October 2024:

“UK new car registrations fell for the second time this year in October, with a 6% year-on-year decline.

“Battery Electric Vehicles (BEVs) were the only powertrain to record year-on-year sales growth last month, with an increase of 24.5%, while diesel and petrol saw falls of 20.5% and 14.2% respectively. For this year-to-date, market share for BEVs is now 18.1%. Given this continues to trail the 22% Zero Emissions Vehicle (ZEV) Mandate target, it is unsurprising that manufacturers appear to be actively limiting their Internal Combustion Engine (ICE) sales in order to maximise the BEV share and reduce the chances of exposure to significant financial penalties.

“However, expensive upfront purchase costs, a lack of charging infrastructure and expensive battery replacement are all prominent concerns deterring people from making an Electric Vehicle (EV) purchase according to EY’s latest UK Mobility Consumer Index. Uncertainty around financing options and residual values of EVs is also likely to prove a stumbling block to the pace of uptake.”

A silver lining amid clouds for the automotive industry

David Borland added: “EY’s latest Mobility Consumer Index highlighted that car buying intent is rising in the UK, which will be encouraging news to manufacturers and dealers alike. Meanwhile, there was a boost to the sector at the Autumn Budget, with the Government’s announcement that over £2 billion will be available for automotive transformation funding over five years as part of the government’s Modern Industrial Strategy.  

“Therefore, there are reasons for optimism going forward, but the road ahead remains complex and nuanced, with global manufacturers balancing the demands of regulation, tariffs and changing consumer needs with their supply of product and manufacturing challenges.”