Big choice, little appetite: Two in five new cars in showrooms are EVs - but there's 'insufficient demand'

By FREDA LEWIS-STEMPEL and RAY MASSEY

Two in five new car models are EVs - but as Britons are offered unprecedented choice there is still a significant lack of public demand, the motor trade body warned today.

The latest analysis from the Society of Motor Manufacturers and Traders (SMMT) shows that motorists now have the widest option of zero emission cars, with over 130 fully-electric vehicles (EVs) to buy. That is a 28 per cent increase on the 102 variants last year.

But private sales continue to lag behind forecasts, registrations data shows - and it's threatening the Government's Net Zero ambitions. 

On Thursday, SMMT chief executive Mike Hawes delivered a warning to MPs that 'natural demand isn't at the level needed', despite Sir Keir Starmer's recent relaxation of Zero Emission Vehicle (ZEV) mandate rules to help ease the burden of EV sales targets.

Speaking to the motoring press at Millbrook testing grounds this morning, he said: 'The government has rightly recognised the need to increase flexibility in the ZEV Mandate, for it to successfully deliver its goal of rapidly decarbonising road transport.

'The new flexibilities are welcome – but the targets themselves do not change, and that presents a challenge due to insufficient demand.'

Two in five new cars are now EVs, giving buyers the best electric choice on record. However, the SMMT said today that there's still not enough private demand and the market needs 'incentivisation'

As well as the 130 fully electric EVs on offer, the SMMT's analysis shows there are also 100 plug-in hybrid (PHEV) and nearly 50 hybrid (HEV) models currently on the market.

This means that four out of five new models have an 'electrified' powertrain.

SMMT chief exec Mike Hawes spoke to press today at Millbrook, saying: 'The fact remains that natural demand isn't at the level needed and the market still needs incentivisation. 'We need the right conditions to drive overall market growth and encourage consumers to switch'

There's also been a significant jump in electric car capabilities. 

The average range of new EVs is almost 300 miles on a single charge, up from 235 last year.

The typical PHEVs can also now deliver 50 miles of zero emissions driving - more than enough for most weekly commutes.

To the buyer's ear, these stats sound very promising. 

However, the SMMT cautioned that 'bold support' is needed to convince more drivers to switch 'as the market isn't moving fast enough for consumer EV uptake'.

Hawes called on ministers to invest in purchase incentives and infrastructure to bolster private EV sales, saying: 'The fact remains that natural demand isn't at the level needed and the market still needs incentivisation.

'We need the right conditions to drive overall market growth and encourage consumers to switch.

'A bigger new car market is better for everyone – it creates a cycle of virtuous growth. 

'It puts a greater volume of EVs on the road, which will create a halo effect of more production – lowering costs. More chargepoint investment – encouraging uptake.   More data for insurers to accurately price premiums. More reasons for maintenance providers to invest in skills. More supply into the used market.'

The Government recently relaxed parts of its stringent Zero Emission Vehicle (ZEV) mandate to make it easier for car manufacturers to hit targets and escape fines but what drivers really need are tax breaks and incentives

In April the government was forced to back down on its stringent EV targets in order to protect the UK's automotive industry from Donald Trump's 25 per cent tariffs on US vehicle imports.

While the 2030 ban on new petrol and diesel cars remain, hybrid cars can continue to be sold until 2035 – a five-year extension – and vehicle manufacturers can more easily hit ZEV targets (which remain unchanged) thanks to increased flexibilities with CO2 credits.

The fines, which manufacturers are more likely to avoid, have also been reduced in size.

Yet, although electrified models currently make up 45 per cent of UK new car sales and EVs hold a 20.4 per cent share of the UK new car market, up from 16.9 per cent a year ago, natural market demand is still well below the mandated government target of 28 per cent for 2025.

This is why the SMMT wants the government to half VAT on new EV purchases, a move which would put 267,000 additional new EVs – rather than fossil fuel vehicles – on the road, scrap, or amend, the VED Expensive Car Supplement, and equalise VAT paid on public charging to that levied at home.

Last month Vicky Read, CEO of Charge UK, said it was 'vital' for the government's ZEV Mandate amendments to be 'swiftly accompanied by the comprehensive package of measures to help drivers to switch.'

Unite general secretary Sharon Graham also doubled down on the need to 'urgently look at additional measures such as VAT exemptions', while Lisa Brankin, Chair of Ford UK and MD of Ford of Britain and Ireland commented: 'What the UK needs is real incentives to help consumers make the switch to electric mobility.'

The calls for better incentives would also help offset new tax stings on EV drivers that make switching less appealing, including paying VED 'road tax' for the first time and an eye-watering 'showroom tax' on new EV models over £40,000.