New Car Sales in the UK Surge in July, Driven by Fleet Purchases

The UK’s new car market experienced a significant boost in July, recording its best month for registrations since the Covid-19 pandemic began. This surge in sales was primarily driven by a substantial increase in fleet purchases, which saw a growth of 61.9% compared to July 2022. Fleet sales accounted for 56% of the total figure last month, reaching an impressive 143,921 units.

Overall, new car sales in July witnessed a year-on-year increase of 28.3%. However, it is important to note that this figure still falls short of the pre-pandemic levels recorded in July 2019, which stood at 157,198 units. Despite this, the industry remains optimistic about the recovery and the positive trajectory of the market.

One notable highlight from the July sales figures is the remarkable growth in battery-electric vehicle (BEV) sales. Sales of BEVs increased by a staggering 87.9% compared to June 2022, reaching a total of 23,010 units. This surge can be attributed to the significant tax incentives offered to fleet users for running BEVs and plug-in hybrids (PHEVs). The current benefit-in-kind (BIK) tax rate for BEVs is set at just 2%, making them an attractive option for fleet buyers. Similarly, PHEVs with CO2 emissions rated at 1-50g/km are charged between 2-14% depending on their electric range.

The rise in BEV and PHEV sales is also indicative of the growing demand for more sustainable and environmentally friendly vehicles. As governments around the world implement stricter emission regulations and consumers become more conscious of their carbon footprint, electric vehicles are becoming increasingly popular choices.

Despite the surge in electric vehicle sales, pure-petrol engines remained the best-selling powertrain in July, with 58,150 units sold. However, this figure represents a 5.3% decline in market share compared to the previous year. Mild-hybrid petrols followed closely behind with 23,590 sales.

While the increase in electric vehicle sales is encouraging, there is still work to be done to support the infrastructure required for their widespread adoption. The Society of Motor Manufacturers and Traders (SMMT) welcomed the installation of 3,056 public EV chargers between April and June, a quarterly record. However, the organization urged the government to accelerate the pace of charger installations to meet the minimum target of 300,000 chargers by 2030. According to the SMMT, the installation rate must triple to almost 10,000 chargers per quarter to achieve this goal.

SMMT Chief Executive Mike Hawes emphasized the importance of making electric vehicles affordable and practical for all drivers across the country. He called on the government to take action and ensure that buying, running, and charging an electric vehicle is accessible to everyone.

Looking ahead, the SMMT forecasts that BEVs’ market share will continue to rise. It is projected to reach 17.8% by the end of this year, up from the current 16.0%. Furthermore, it is anticipated that BEVs will account for 22.6% of all new car sales in 2023, aligning with the government’s zero-emission-vehicle mandate requiring 22% of all sales to be zero-emission vehicles by 2024.

In terms of individual models, the Ford Puma emerged as the best-selling car in the UK last month, with 4,124 registrations. It was followed by the Kia Sportage (3,060) and the Nissan Qashqai (3,032). The Qashqai had previously held the title of the UK’s overall best-seller in 2022.

The strong performance of the UK’s new car market in July, driven by fleet purchases and the increasing popularity of electric vehicles, is a positive sign for the industry’s recovery. As the market continues to rebound from the impact of the pandemic, it is crucial for the government and industry stakeholders to work together to support the transition to sustainable mobility and ensure the necessary infrastructure is in place for widespread electric vehicle adoption.