Sales of new electric vehicles (EV) continued on their upwards trajectory last month, with pure electric battery cars accounting for almost a fifth of the new car market.
According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), sales of new EVs rose 7.4 per cent in June, driven largely by demand from business fleets and corporate salary sacrifice schemes.
Individual consumer uptake continued to soften slightly, but the uptick in sales pushes the industry closer to meeting targets imposed through the first year of the Zero Emission Vehicle (ZEV) Mandate, which require manufacturers to ensure 22 per cent of new vehicle sales are zero emission models this year. Companies that miss the target face the risk of fines.
The latest figures show sales of plug-in hybrids EVs surged by 30 per cent last month to take a 9.3 share of the overall market, while sales of hybrid models rose by 27.2 per cent to achieve a near-15 per cent market share.
The results mean fully or partly electrified vehicles accounted for 43.2 per cent of the entire car market in June 2024, with both petrol and diesel car sales - which made up 51 per cent and six per cent of all sales, respectively - losing significant ground compared to the same month last year.
Diesel sales last month were down more than 17 per cent compared to June 2023, while petrol sales fell 7.8 per cent over the same period, the data shows.
Overall sales across the entire new car market have now surpassed one million in 2024 so far, the first time in five years that the milestone has been reached in the first half of the year, according to SMMT. Total new UK car sales grew 1.1 per cent in June to reach almost 180,000 units, the data shows.
The increase in demand for EVs following several months in which sales growth slowed will fuel hopes that recent price reductions for some models could help ensure manufacturers comply with the ZEV Mandate.
However, with the 22 per cent market share target covering the whole year, the industry remains concerned that without increased demand from private motorists they will struggle to meet the target and could be left facing significant fines.
As such, the SMMT has continued to call for the next government to boost incentives to encourage more private buyers to switch to battery cars.
EV demand from private buyers has fallen 10.8 per cent so far this year, with fewer than one-in-five new battery cars going to private buyers, according to the trade body.
The group today reiterated its calls for the next UK government to slash VAT on new EVs in order to grasp what it has claimed is a £50bn opportunity for the UK economy.
"The year's midpoint sees the new car market in its best state since 2021 - but this belies the bigger challenge ahead," said SMMT's chief executive Mike Hawes. "The private consumer market continues to shrink against a difficult economic backdrop, but with the right policies in place, the next government can re-energise the market and deliver a faster, fairer zero emission transition. All parties are agreed on the need to cut carbon and replacing older fossil fuel based technologies with new electrified powertrains is the essential step to achieving that goal."
Colin Walker, head of transport at the Energy & Climate Intelligence Unit (ECIU), pointed out EVs have now increased their share of the new car market for four consecutive months "proving that EV sales are doing anything but stalling".
"It's been six months since targets for new EV sales came into force, and they are having the desired effect," he said. "Competing for customers to ensure they hit these targets, manufacturers are engaged in a price war, a war for motorists. Ultimately it is British drivers who benefit, and the sustained increase in sales that we are seeing is proof that, once EVs get closer in upfront price to their petrol equivalents, the demand for cheaper and cleaner electric driving is very much there."
Walker also highlighted the fact that many EV sales are being driven by salary sacrifice schemes, which enable drivers to benefit from significant tax savings, and that in turn new EVs hitting the roads today will help to boost the availability of EVs through the used car market in years to come.
"In three of four years' time these new EVs will hit the second-hand market, which is already making the savings that come from owning an EV available to the 80 per cent of us who buy our cars on the used market," he said. "This is making driving more affordable for more households during a cost of living crisis."