UK BEV Sales Surge in September, But Industry Pushes for More Government Incentives

UK BEV

The UK automotive industry reached a significant milestone last month with record-breaking sales of battery electric vehicles (BEVs), which climbed to 56,387 units, marking a new high for September. Despite this promising uptick, car manufacturers are urging the government to extend consumer incentives to support the continued growth of electric vehicle sales, according to the latest report from the Society of Motor Manufacturers and Traders (SMMT).

While fleet sales of BEVs saw a modest increase of 3.7% last month and a more significant 16.3% rise year-to-date, private sales painted a different picture. Private BEV sales dipped by 1.8% in September, contributing to a 9.4% drop year-to-date. Overall, UK car sales edged up 1% last month, with total sales for the year reflecting a 4.3% increase.

SMMT chief executive Mike Hawes commented on the record BEV sales but warned that "the market is not growing quickly enough to meet mandated targets." Although BEVs claimed 20.5% of market share in September, the year-to-date share remains at 17.8%, falling short of the UK government's mandated target of 22% for 2024. Some market analysts speculate that BEV sales will likely accelerate toward the end of the year as automakers seek to avoid penalties for failing to meet these targets.

Carmakers Urge Government Support

Car manufacturers have made substantial investments in reducing the cost of BEVs, but many believe that further government support is necessary to help bridge the gap. On October 4, the SMMT, in collaboration with 12 major carmakers including Volkswagen, BMW, and Ford, sent an open letter to the Chancellor of the Exchequer, urging the government to consider new measures to incentivize BEV purchases and improve charging infrastructure.

The letter proposed several initiatives, such as temporarily halving value-added tax (VAT) on new EV purchases, scrapping the value excise duty supplement for BEVs, and lowering the public charging VAT rate to 5%—the same rate applied to private households. The SMMT also called for the extension of business incentives, including the Benefit in Kind (BiK) rate for electric vehicles, which is set to gradually rise from its current 2% to 5% by 2027-28. In comparison, diesel and petrol vehicles hold BiK rates of 25% or higher.

Additionally, the UK's plug-in van grant offers a 35% discount—up to £5,000 off the price of new electric vans weighing up to 3.5 tons, and up to £2,500 for vans under 2.5 tons. However, these grants have been reduced since 2021, when savings were as high as £6,000 and £3,000 respectively. The government has confirmed that the current grants will remain in place until the end of the 2024-25 financial year, but automakers argue that further incentives are needed to ensure sustained momentum in the transition to electric vehicles.