Tesla’s Model Y topped the UK new car sales chart in June in what was an 11th consecutive month of growth in vehicle registrations – driven partly by a 40 per cent jump in the number of electric vehicles entering Britain’s roads.
Yet despite the headline figures suggesting ripe demand for electric cars, industry bosses raised alarm bells about the slow private buyer uptake of greener models, as incentivised fleets and businesses were the driving force behind increased EV sales.
And there’s also a couple of very good reasons why Tesla’s Model Y took the number one spot in June…
Over 5,500 Tesla Model Ys were registered in the UK last month – more than any other car. But there is a very good reason for this…
Why is the Tesla Model Y at the top of the sales charts?
Some 5,539 Tesla SUVs were registered in the UK last month, just pipping the Ford Puma crossover with 5,453 leaving dealerships in June.
However, this is because Tesla registrations traditionally leap at the end of each quarter, which is when a fresh shipment of vehicles arrive from Germany, where the Model Y is produced for the UK market.
Therefore it comes as little surprise to see a Tesla rise towards the top of the sales order at the end of the second quarter, as it also did in June 2022 (taking second spot behind the Vauxhall Corsa that month).
Tesla registrations tend to leap at the end of each quarter. This is when new shipments arrive
The Model Y’s success is also driven by significant Tesla price cuts since the beginning of 2023 as the US maker bids to attract more customers
While the Model Y jumped to the top of the order in June, it still sits some 3,214 units behind the most popular car of 2023 so far, the Ford Puma crossover
Looking at sales in the first six months of 2023 as a whole, the Model Y sits fourth overall with 19,551 registrations – some 3,214 behind the Puma, which was the most popular new car in the opening half of this year.
The Model Y’s success is also driven by significant Tesla price cuts since the beginning of 2023, as the US maker bids to attract more customers.
The price of the Model Y Performance, for example, has been slashed by more than £9,000 since the start of January.
Tesla earlier this week announced record global car deliveries in the second quarter, as it remained in a price war in the rapidly expanding electric car market.
Elon Musk’s firm delivered 466,140 cars in the three months to the end of June, higher than predictions of 445,000 and up from 422,875 in the first quarter.
Looking further down the top 10 order of most popular new cars in Britain so far in 2023, Ford’s Fiesta sits in ninth place overall with over 15,000 sales.
The supremely popular Ford supermini will cease production on Friday, with the Fiesta name being killed off to make way for a new small EV replacement.
While registrations grew in June, sales are still 25% down on pre-pandemic 2019 levels in the first six months of the year
EV registrations driven by fleet demand
In total, some 177,266 new cars entered Britain’s roads last month, which is an increase of a quarter (25.8 per cent) on June 2022 figures.
And more than one in six of these cars were battery electric vehicles.
A whopping 31,700 EVs were registered last month, which is a year-on-year growth of 39.4 per cent and means electric cars accounted for 17.9 per cent of the market share in June.
But a deeper dive into the data shows that the majority of these registrations are not private buyers but fleets and businesses that receive substantial benefit-in-kind (BiK) tax breaks for electric company cars.
The Society of Motor Manufacturers and Traders – the trade body that publishes registration data – has called for the government to take action to accelerate consumer appetite to transition to an EV.
Among its recommendations is to cut VAT on electricity sold at public EV chargers.
Mike Hawes, SMMT chief executive, said: ‘The new car market is growing back and growing green, as the attractions of electric cars become apparent to more drivers. But meeting our climate goals means we have to move even faster.
‘Most electric vehicle owners enjoy the convenience and cost saving of charging at home but those that do not have a driveway or designated parking space must pay four times as much in tax for the same amount of energy.
‘This is unfair and risks delaying greater uptake, so cutting VAT on public EV charging will help make owning an EV fairer and attractive to even more people.’
Jon Lawes, managing director of Novuna Vehicle Solutions, told This is Money: ‘Demand from fleets for EVs continues to grow but we urgently need a long-term strategy for building advanced automotive manufacturing supply chains in the UK if we are to realise a sustained uptake of electric vehicles.
‘At the heart of the problem is the requirement to deliver domestic lithium battery manufacturing at scale which is critical if we are to drive down the cost of EVs for private buyers and achieve zero emission mobility.
‘Without a resilient, self-sufficient UK-based battery manufacturing capacity, our ability to make and export EVs and be at the forefront of the net-zero revolution hangs in the balance.’
John Wilmot, CEO at car leasing comparison website LeaseLoco, says cutting VAT on public charging ‘is not the silver bullet’ needed to boost electric vehicle demand.
‘The harsh reality is that EVs are just too expensive for the average consumer, particularly at a time when millions are struggling to cope with higher living costs,’ he said.
The harsh reality is that EVs are just too expensive for the average consumer…
John Wilmot, LeaseLoco CEO
‘Elon Musk has recognised that affordability is a major barrier to electric vehicle uptake which is why he vigorously cut Tesla prices to inject life into the market.
‘Other manufacturers have followed suit but they aren’t in a position to cut prices indefinitely.
‘And there is no point spending billions building a charging infrastructure for the shift to greener motoring if the vast majority of people can’t afford to buy an EV.
‘Now is the time for the Government to step in and reintroduce incentives to make switching affordable for the many, not the few.’
The Zero Emission Vehicle mandate will outline annual targets for increase sales of electric cars starting next year. Experts warn 32 manufacturers are at risk of missing 2024 target
32 car makers on course not to meet Zero Emission Vehicle mandate requirements from next year
A total of 949,720 new cars have been sold in the UK in the first six months of this year – this is down 25.2 per cent on the half-year registrations recorded in pre-pandemic 2019.
Among the near one million new models in 2023 are 152,968 EVs, meaning zero-emission models account for 16.1 per cent of all new passenger vehicles entering the car parc.
With the government widely expected to impose a Zero Emission Vehicle (ZEV) mandate next year, the current share of electric cars could be very problematic for a number of manufacturers.
Ministers have outlined a requirement for 22 per cent of vehicle sales in 2024 to be electric.
This is the first of annual increasing EV registration targets to 2035, when 100 per cent of new car sales need to be zero emission models.
Failure to meet these targets is expected to see makers incur fines of £15,000 per vehicle.
Thinktank New AutoMotive estimates that 32 car manufacturers eligible for inclusion in the ZEV mandate (those that produce more than 2,500 vehicles per year) would collectively be 44,000 credits short of meeting their regulatory requirements if the 2024 target were in force in the last 12 months.
This means they would have to either borrow or buy out of their regulatory obligations, raising around £660million in buy-out revenues.
The SMMT says manufacturers are offering a range of EV deals for private buyers, including flexible subscription models and attractive finance rates, but more needs to be done by other stakeholders to make purchasing even more compelling.
