Industry Insights - September 2024

This month at a glance

Electric vehicle (EV) registrations grew in August

Traditionally one of the quietest months of the year, EV registrations achieved a market share of 22.6% in August (highest since December 2022). The SMMT attributes the growth to the recent heavy discounting by manufacturers and dealers.

Volvo abandons its EV target

The manufacturer’s ambitious target to sell only electric cars by 2030 has been abandoned amid a global slowdown in growth for battery-powered vehicles, following similar moves from Ford and GM.

Government plans to reinstate the 2030 phase-out for new ICE cars

A consultation is expected to start next month, which is likely to focus on defining the specifications required for cars and vans to be officially categorised as a ‘hybrid’ and in turn, can continue to be sold between 2030-2035.

EU tariffs update

In June, we reported that the European Commission was expected to raise duties on imports of Chinese battery-powered cars from 10% to 20-25%. Last month, the European Union set out its initial proposal for final duties, establishing a separate rate of 9% for Tesla EVs, a sharp reduction from the higher duty that will apply to all cooperating companies – now set at 20.7%. The proposed final duties will be subject to a vote by the EU’s 27 states and will be implemented unless a qualified majority of 15 EU members (representing 65% of the EU population) vote against.

ULEZ scrappage scheme closed on 7 September

Previously, anyone living in one of the 32 London boroughs or the City of London with an eligible vehicle could apply for up to £2,000 for scrapping their car as part of a £110 million scrappage scheme. The scheme has now been closed, although there is a grace period for community transport and disabled Londoners, and this remains open until October 2027.

HMRC publishes new Advisory Fuel Rates (AFRs) and Advisory Electric Rates (AER)

Effective from 1 September, these replace the rates announced for the quarter from 1 June. AFRs for both diesel and petrol company-provided vehicles decrease in line with reducing pump prices since the last quarterly rate review and the AER for electric provided vehicles has also been cut by 1ppm from 8p to 7p in line with the reduction in home energy prices. Pre-budget campaigns from the industry renew the request for AER rates to reflect different vehicle use cases (car vs van), and the ability to charge at home vs public charging network.

Government direction, policy and industry lobbying

Happy EV after

Last month we covered the BVRLA’s new EV affordability campaign, which is focused on supporting the used electric vehicle (EV) market. A major supply/demand imbalance means that used EV prices have been falling continuously for nearly two years, with some costs dropping by 50%. While good for second-hand buyers, this massive and unpredictable depreciation threatens the motor finance industry’s ability to continue providing affordable lease rates on new EVs.

The Government needs to intervene now to restore balance to the automotive market and safeguard the transition to zero emission motoring. The BVRLA is working with industry partners on a campaign to ask for intervention which will boost demand in the used EV market and achieve our climate goals for future generations.

These interventions include launching a public information campaign, to help dispel many of the current myths around EVs, implement a standardised battery health certificate, provide grants for used EVs, and reduce Benefit-in-Kind (BiK) on used EVs for four years.

The campaign launched at a Parliamentary reception this month, and was attended by Zenith’s Ian Hughes, CEO Corporate and Consumer divisions and Claire Evans, Fleet Consultancy Director. You can read more on the campaign and access a free tool which allows you to contact your MP and ask them to support the #happyEVafter campaign.