SMMT: Auto industry calls for VAT fairness on invoicing as February market gets electric boost

UK new car registrations rose 15.0% in February as 58,994 new cars hit UK roads, according to latest figures from the Society of Motor Manufacturers and Traders (SMMT)

UK new car registrations rose 15.0% in February as 58,994 new cars hit UK roads, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). The rise of 7,682 units was from the same month in 2021, when the pandemic shuttered car showrooms across the UK. Despite this positive performance, registrations are down -25.9% from pre-pandemic levels as vehicle supply remains constrained by semiconductor shortages.1

Compared to February 2021, when showrooms were closed and only “click and collect” was allowed, private registrations increased by 30.0%. Large fleet registrations were flat, up just 2.0%, indicating that in a supply-constrained market, manufacturers are also prioritizing private customers, which accounted for more than 80% of growth. While business purchases increased by 110.7%, this equates to an increase of only 693 units.

It was, however, another bumper month for battery electric vehicles (BEVs), which took a 17.7% market share to 10,417 units, while plug-in hybrid (PHEV) registrations reached 4,677. units and a market share of 7.9%. Combined with hybrid (HEV) registrations (6,883), electrified vehicles accounted for more than a third of all new cars leaving dealerships. While this demonstrates the growing demand for electric cars, February is typically the month with the lowest volume as many buyers delay purchases until March “new plate”, and fluctuations in supply for certain key models may have a more pronounced effect in terms of market share.

However, the need to accelerate the provision of public charging stations is of more concern for the long-term provision of net zero road transport. Investments are underway, but at a rate that still lags behind the adoption of plug-in vehicles. Last month, the industry released its seven-point plan to increase the number of public chargers on the street ahead of needs.2

Meanwhile, April will see the effective end of the Electric Vehicle Homecharge Scheme (EVHS), which provided vital funding for homeowners to install their own charging station. Ahead of government’s spring statement, SMMT is calling for an extension of both EVHS and its commercial counterpart, the Workplace Charging Scheme, beyond 2025 to ensure EV adoption stays on track to meet the government’s net zero deadlines. It also recommends that the VAT on electricity used for public charging stations be reduced to match that for household use, so that EV drivers are treated the same no matter where they are. recharge their vehicle.

Mike Hawes, Managing Director of SMMT, said:

Despite February’s traditional low registration numbers, consumers are turning to electric vehicles in ever-increasing numbers. More than ever, investments in infrastructure must accelerate
to match this growth. The government must use its forthcoming spring statement to enable this transition, continuing to support home and workplace charging, boosting the rollout of public charging stations to tackle charging anxiety and, given the massive increase in energy prices, by reducing VAT on public charging stations. This will boost consumer and business confidence and accelerate our transition to zero-emission mobility.

1. Registration February 2020: 79,594