New figuresreleased by the Society of Motor Manufacturers and Traders (SMMT), show thatfleet and business registrations declined by 41% in October compared to theprevious year. Overall, 106,265 cars were registered in the month, a 5% declineon the 140,945 units in October 2020.

While thiswas the market’s weakest performance since October 1991, year-to-datestatistics show that fleet and business registrations are now 1.5% higher thanlast year, with 1,422,879 cars being registered.

This data,along with the ongoing supply issues and current economic outlook has led thelatest SMMT forecast to be revised downward by almost 9% to 1.66 million units.Again, while this performance would be down on 2019’s 2.3 million unit performance,the current predictions would still see 2021 finish 30,000 units up on 2020.

Thisrecovery is forecast into 2022, with the industry anticipating some 1.96million new car registrations next year, driven largely by the continued demandfor plug-in vehicles. Currently, new battery-powered electric vehicles (BEVs)are anticipated to be more popular than new conventional and mild-hybrid dieselby the end of 2022 and to account for more than a fifth of all new carregistrations next year.

Mike Hawes,chief executive of the SMMT, said: “The current performance reflects thechallenging supply constraints, with the industry battling againstsemiconductor shortages and increasingly strong economic headwinds…

“Electrifiedvehicles, however, continue to buck the trend” Hawes continued, highlightingthe importance of overcoming the affordability barrier and increasing thenumber of publicly available charging points to continue this growth andtransition away from the use of fossil fuels.

Despite thechallenges faced by fleets this month, Jamie Hamilton, automotive director, andhead of electric vehicles at Deloitte suggested that there was better newsahead, saying   "With CFOs placinggreater emphasis on increasing capital expenditure in the quarter ahead, andwith more businesses looking to reduce emissions by transitioning fleets andcompany cars to electric, we should see fleets pursue replacement vehicles atscale sooner rather than later,"

Accordingto Hamilton, the UK is well on its way to an all-electric future. The sales ofbattery electric vehicles also grew by 73% compared to last year, the result ofwhich has meant that the SMMT expects more plug-in electric vehicles to be soldin 2021 than in the whole of the previous decade combined.

Commentingon the move towards electric vehicles, Richard Peberdy, UK head of automotiveat KPMG, added: “The impact that record high fuel prices will have on pushingmotorists towards electric vehicle options shouldn’t be understated.”

Whileelectric vehicles have their challenges, with the energy crisis set to makedrivers consider their tariffs more carefully to avoid any unexpected bills,manufacturers have been careful to ensure the availability of as many plug-invehicles as possible in the face of the semiconductor shortage currentlyimpacting global car production.

Uptakerates of plug-in vehicles began to accelerate dramatically during 2020, as thebillions of pounds invested by manufacturers in new technology resulted in thewidest ever choice of zero emission-capable cars.

A range oftax breaks and grants has meant that fleets have been particularly incentivisedto invest in plug-in cars. Subsequently, around two in every three new BEVregistrations, this year have been for large fleets.

While theUK has plans to be the first major automotive market to end the sale of newconventional petrol and diesel cars in 2030, sustaining the surge that the pastyear has seen will require the continuation of purchase incentives to encouragedrivers to move away from traditional petrol and diesel vehicles.

MeryemBrassington, electrification propositions lead at Lex Autolease, says that "Aselectric vehicles continue to increase their market share, sustained investmentfrom policymakers to facilitate the journey towards an electric future will becritical,"

Thegovernment’s electric vehicle infrastructure and manufacturing strategycommitments are part of the wider Net Zero Strategy, which will see a halvingof the UK’s emissions in just over a decade. While there is a £1 billion funddesigned to boost electric vehicle charging and production, it is vital thatthe rollout of charging facilities can keep pace with the acceleration ofelectric vehicle registration.