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Chart of the Week

2020

Risin’ up to the challenge of a rival: Battery Electric Vehicle sales

Katie Hickford Analyst

Despite a 97% drop in vehicle sales and difficult market conditions, demand for Battery Electric Vehicles (BEVs) continued, according to the Society of Motor Manufacturers and Traders Ltd (SMMT). 1,374 BEVs were registered during April, accounting for 32% of all new vehicle registrations, outselling diesel cars (1,079) for the first time. Only 4,321 vehicles were sold during April, the lowest level since 1946, reflecting the economic uncertainty brought about by COVID-19 across vehicle fleets and private sales. BEV registrations as a proportion of new vehicles remained high (12.0% in May), while June recorded the second highest ever monthly BEV registrations (8,903 vehicles), marking a tentative recovery as the lockdown began to be lifted. Resilient demand for BEVs appears to be driven by four key factors. From 6 April, changes to the Benefit in Kind company car tax means zero-emission vehicles pay no tax in 2020-2021, providing an incentive for businesses to transition their fleets. Changes to the Plug-in grant in the March 2020 Budget means that hybrid cars with a range of less than 70 zero emission miles are no longer eligible for funding, encouraging BEV sales. Uptake is further improved by an increased range of vehicle models available, meaning a greater choice for both consumers and businesses. Some EV models are in high demand - the Tesla Model 3 was named the most popular UK vehicle in April, accounting for 15% of sales that month. Perhaps more importantly in this period, EVs still have longer lead times between ordering and delivery compared to petrol and diesel cars (although this is improving), so ...

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