New figures released by the Society of Motor Manufacturers and Traders (SMMT), show that fleet and business registrations declined by 41% in October compared to the previous year. Overall, 106,265 cars were registered in the month, a 5% decline on the 140,945 units in October 2020.
While this was the market’s weakest performance since October 1991, year-to-date statistics show that fleet and business registrations are now 1.5% higher than last year, with 1,422,879 cars being registered.
This data, along with the ongoing supply issues and current economic outlook has led the latest 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.
This recovery is forecast into 2022, with the industry anticipating some 1.96million new car registrations next year, driven largely by the continued demand for plug-in vehicles. Currently, new battery-powered electric vehicles (BEVs)are anticipated to be more popular than new conventional and mild-hybrid diesel by the end of 2022 and to account for more than a fifth of all new car registrations next year.
Mike Hawes, chief executive of the SMMT, said: “The current performance reflects the challenging supply constraints, with the industry battling against semiconductor shortages and increasingly strong economic headwinds…
“Electrified vehicles, however, continue to buck the trend” Hawes continued, highlighting the importance of overcoming the affordability barrier and increasing the number of publicly available charging points to continue this growth and transition away from the use of fossil fuels.
Despite the challenges faced by fleets this month, Jamie Hamilton, automotive director, and head of electric vehicles at Deloitte suggested that there was better news ahead, saying "With CFOs placing greater emphasis on increasing capital expenditure in the quarter ahead, and with more businesses looking to reduce emissions by transitioning fleets and company cars to electric, we should see fleets pursue replacement vehicles at scale sooner rather than later,"
According to Hamilton, the UK is well on its way to an all-electric future. The sales of battery electric vehicles also grew by 73% compared to last year, the result of which has meant that the SMMT expects more plug-in electric vehicles to be sold in 2021 than in the whole of the previous decade combined.
Commenting on the move towards electric vehicles, Richard Peberdy, UK head of automotive at KPMG, added: “The impact that record high fuel prices will have on pushing motorists towards electric vehicle options shouldn’t be understated.”
While electric vehicles have their challenges, with the energy crisis set to make drivers consider their tariffs more carefully to avoid any unexpected bills, manufacturers have been careful to ensure the availability of as many plug-in vehicles as possible in the face of the semiconductor shortage currently impacting global car production.
Up takers of plug-in vehicles began to accelerate dramatically during 2020, as the billions of pounds invested by manufacturers in new technology resulted in the widest ever choice of zero emission-capable cars.
A range of tax breaks and grants has meant that fleets have been particularly incentivised to invest in plug-in cars. Subsequently, around two in every three new BEV registrations, this year have been for large fleets.
While the UK has plans to be the first major automotive market to end the sale of new conventional petrol and diesel cars in 2030, sustaining the surge that the past year has seen will require the continuation of purchase incentives to encourage drivers to move away from traditional petrol and diesel vehicles.
Meryem Brassington, electrification propositions lead at Lex Autolease, says that "As electric vehicles continue to increase their market share, sustained investment from policymakers to facilitate the journey towards an electric future will be critical,"
The government’s electric vehicle infrastructure and manufacturing strategy commitments are part of the wider Net Zero Strategy, which will see a halving of the UK’s emissions in just over a decade. While there is a £1 billion fund designed to boost electric vehicle charging and production, it is vital that the rollout of charging facilities can keep pace with the acceleration of electric vehicle registration.