Electric accounts for one in four new cars as industry demands sales help
Battery electric vehicles (BEVs) accounted for 25% of new car registrations in November, an almost 60% increase year-on-year and well above a government target manufacturers have called on ministers to relax.
BEVs were the only sector of the car market to see increased sales in November, which saw new registrations down almost 2%, the second consecutive month of contraction and a third in four months the industry blames on the race to meet EV targets.
Petrol registrations fell by almost 18% and account for 53% of new registrations in 2024, with diesel sales falling by more than 10% in November, and declining to 6.4% market share in the year to date. Hybrid sales, both mild and plug-in, also fell.
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The figures come as manufacturers have stepped up lobbying of ministers to provide support for the industry to meet a target that 22% of all car sales, and 10% of vans, must be zero-emission in 2022.
The industry says EV sales are rising only because of unsustainable discounting totalling £4bn this year, and this week Ford’s UK managing director told Sky News the government should consider direct cash incentives or tax cuts to support private EV sales.
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Ford calls for incentives to buy EVs
Last week the business secretary Jonathan Reynolds announced a review of the zero emission mandate, which increases to 28% next year and every year towards the eventual phase out of new internal combustion vehicles in 2030.
His move followed the closure of Vauxhall’s diesel van plant at Luton, a decision owners Stellantis have been considering for some time but blamed on the UK’s environmental targets.
Figures for November also show a decline in fleet car sales, which do benefit from tax breaks for EVs and have driven much of the expansion in recent years. Private sales, which make up the bulk of the UK car market, accounted for just 40% of new registrations.
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The Society of Motor Manufacturers and Traders (SMMT) says EV market could reach 19% for the year, short of the 22% target, and that demand for electric cars is weaker than when the target regime was introduced by the Conservative government last year.
Mike Hawes, chief executive of the SMMT, said: “Manufacturers are investing at unprecedented levels to bring new zero emission models to market and spending billions on compelling offers. Such incentives are unsustainable – industry cannot deliver the UK’s world-leading ambitions alone.
“It is right, therefore, that government urgently reviews the market regulation and the support necessary to drive it, given EV registrations need to rise by over a half next year.”
The UK remains the second-largest market for EVs in Europe, with every major UK-based manufacturer (with the exception of Toyota) having committed to new electric models, powertrain or battery production in recent years.
Supporters of rapid decarbonisation of transport argue the figures show that manufacturers are meeting market demand, and that the government would be wrong to relax the headline target because some manufacturers are missing their market share.
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Ben Nelmes, CEO of New Automotive, said: “Thanks to the investments and efforts made by carmakers, UK motorists now have more electric options at more competitive prices than ever before.
“This impressive progress is the result of the combination of ambitious and flexible EV targets, and significant tax breaks for electric cars. This combination of targets and incentives is putting the UK in the fast lane to greater energy independence and cheaper, cleaner motoring.
“As global electric car sales wax and wane, the UK’s car market is heading in one direction – and fast. Ministers must not pull the rug under this progress as they revisit UK policy on EVs.”
The US central bank has cut interest rates for the first time this year, in a move president Donald Trump will likely declare is long overdue.
Mr Trump has demanded cuts to borrowing costs from the Federal Reserve ever since worries emerged in the world’s largest economy that his trade war would stoke US inflation.
The president – currently in the UK on a state visit – has, on several occasions, threatened to fire the Fed chair Jay Powell and moved to place his own supporters on the bank’s voting panel.
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He was yet to comment on the rate decision.
The fallout from the row has resonated globally, sparking worries about central bank independence. Financial markets have also reflected those concerns.
The bank, which has a dual mandate to keep inflation steady and maintain maximum employment, made its move on Wednesday after a major slowdown in the employment market that has seen hiring ease sharply.
The latest economic indicators have shown caution over spending among both companies and consumers alike.
The Fed said the economy had moderated.
Inflation, while somewhat elevated due to the effects of higher import costs from the trade war, has not taken off as badly as some economists, and the Fed, had initially feared.
Mr Trump has sought to fire Fed rate-setter Lisa Cook. File pic: AP
Its 12-member panel backed a quarter point reduction in the Fed funds rate to a new range of between 4% to 4.25%.
The effective interest rate is in the middle of that range.
Crucially for Mr Trump, who is trying to inspire growth in the economy, the Fed signalled more reductions ahead despite continued concern over inflation.
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Financial markets saw a further two quarter point rate cuts before the year’s end.
The dollar, which has weakened in recent days on the back of expectations of further rate cuts, fell in the wake of the decision and the Fed’s statement.
It was trading down against both the euro and pound. Sterling was almost half a cent up at $1.17.
This Fed meeting was the first with new Trump appointee Stephen Miran on the voting panel.
He was chairman of the president’s Council of Economic Advisers before being handed the role this week.
His was a sole voice in the voting for a half percentage point cut. It is clear, though the identity of participants’ forecasts are not revealed, he was the lone voice in calling for a further five quarter point reductions this year.
Mr Trump has sought to fire a member of the Fed’s board, Lisa Cook, to bolster his position further but that decision is currently subject to a legal challenge.
Some of the biggest US technology companies have pledged billions of pounds of investment to turbocharge Britain’s artificial intelligence (AI) industry, as the two countries announce a landmark technology deal.
Nvidia, Microsoft, Open AI and Google made a flurry of announcements to coincide with President Trump‘s state visit to the UK.
They include plans to build data centres and invest in AI research and engineering.
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Sir Keir Starmer described the agreement, which both leaders will sign over the coming days, as “a generational step change” in Britain’s relationship with the US.
The deal will see both countries cooperate on AI, quantum computing and nuclear energy, with investment in modular reactors revealed earlier this week.
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The prime minister said it was “shaping the futures of millions of people on both sides of the Atlantic, and delivering growth, security and opportunity up and down the country”.
The government said the deal would deliver thousands of jobs, with a new AI Growth Zone in the North East of England earmarked for 5,000 jobs.
The region will host a new data centre developed in partnership with ChatGPT developer OpenAI, the US chip giant Nvidia and the British data centre company Nscale. The UK government will supply energy for the project, which will be based in Blyth.
Jensen Huang, chief executive of Nvidia, who has previously drawn attention to Britain’s inadequate levels of digital infrastructure, said: “Today marks a historic chapter in US-United Kingdom technology collaboration.
“We are at the Big Bang of the AI era – and the United Kingdom stands in a Goldilocks position, where world-class talent, research and industry converge.”
Nvidia chief executive Jensen Huang. Pic: Reuters
The Blyth data centre is part of Stargate, Open AI’s infrastructure project to build large data centres across the US.
The company has also developed sites in Norway and the UAE. Nvidia, which provides the graphic processing chips (GPUs), expects to generate $20bn (£14.6bn) by the end of this year from “sovereign” deals with national governments over the coming years.
Sam Altman, OpenAI’s chief executive, said: “The UK has been a longstanding pioneer of AI, and is now home to world-class researchers, millions of ChatGPT users and a government that quickly recognised the potential of this technology.
“Stargate UK builds on this foundation to help accelerate scientific breakthroughs, improve productivity, and drive economic growth.”
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Microsoft also pledged £22bn, its largest ever investment in the UK, to expand data centres and construct the country’s largest AI supercomputer.
Meanwhile, Google owner Alphabet pledged £5bn to expand its data centres in Hertfordshire and fund its London-based subsidiary DeepMind, which uses AI to power cutting edge scientific research. The company was founded in Britain and acquired by Google in 2014.
Other investments include £1.5bn from AI cloud computing company CoreWeave and £1.4bn from Salesforce.
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