New car sales in the UK surged to the highest February figure in 20 years, boosted by companies buying electric vehicles for their fleets, even as private uptake of EVs declined.
Registrations of new cars climbed 14% year-on-year to 84,886 vehicles last month, the best February performance since 2004, according to the Society of Motor Manufacturers and Traders (SMMT).
It was the 19th consecutive month of growth, mainly driven by company fleets investing in the latest vehicles. February is traditionally volatile, as the lowest-volume month of the year, with buyers often choosing to wait until March and the new number plate.
Electrified vehicles recorded robust growth, with sales of hybrid electric vehicles rising 12.1% but taking a slightly smaller market share of 12.7%. Plug-in hybrids posted the largest growth for the month, rising 29.1% to reach 7.2% of the market. Battery electric vehicles (BEVs) also outpaced the rest of the market, rising 21.8% to account for 17.7% of registrations.
The SMMT said the long-term picture would become clearer in March, the busiest month for car sales.
The increase in EV uptake is entirely driven by fleets, owing to fiscal incentives, while private buyers have accounted for less than a fifth (18.2%) of new BEVs sold so far this year.
Many consumers worry about the cost of electric vehicles, the longevity of their batteries and the availability of charging points. A House of Lords committee last month called on ministers to intervene to boost the secondhand EV market and allay “uncertainty and concerns” over the health of the vehicles’ batteries. Peers on the environment and climate change committee urged the government to step up efforts to encourage EV adoption.
The SMMT said a faster transition depended on more private buyers switching but that the lack of significant incentives was holding many back. It added that Wednesday’s budget was an opportunity for the chancellor to stimulate demand by halving VAT on new EVs for three years, amending proposed vehicle excise duty changes, and reducing VAT on public charging in line with home charging.
While consumers do not pay VAT on other emission-reduction technologies such as heat pumps and solar panels, private EV buyers pay the full 20% levied on all cars, whether they are electric, petrol or diesel. Halving VAT on new EV purchases would save the average buyer about £4,000 on the upfront purchase price but cost the Treasury less than the plug-in car grant that was scrapped in 2022, the SMMT argued.
Moreover, upcoming changes to vehicle excise duty next year would lead to the majority of buyers of battery-powered electric vehicles being effectively penalised by £1,950 for going electric because of the “expensive car” supplement.
Those unable to charge a BEV at home pay a “pavement penalty” of 20% VAT on public charging – quadruple the rate paid by those with the opportunity to charge at home.
Mike Hawes, the SMMT chief executive, said: “The new car market’s ability to deliver growth continues with its best February for 20 years and this week’s budget is an opportunity to ensure that growth is greener.
“Tackling the triple tax barrier as the market embarks on its busiest month of the year would boost EV demand, cutting carbon emissions and energising the economy. It will deliver a faster and fairer zero-emission transition, putting Britain’s EV ambition back in the fast lane.”
