The millionth new plug-in car sold in Britain last month was sold in a showroom but sales of electric vehicles seem to be slowing as total registrations remain stalled at historically low levels.
In September, more than 225,000 vehicles bearing the new 72 license plate hit the road, making it the second busiest month of the year for the motor trade after March.
New registrations increased by 4.6 per cent on the same month last year, but it was the worst September since 1998, according to the Society of Motor Manufacturers and Traders. Volumes are down more than a third on pre-pandemic levels in 2019 and are about half of that of 2016, the most recent high water mark for the trade.
The total number of new registrations for the first nine months of the year was 1.2 million, down 8 per cent on 2021.
The market that has been disrupted on the supply side for the past two and a half years as manufacturers struggle to source parts is hampered on the demand side as consumers baulk at inflation and soaring interest rates, according to analysts.
Higher household costs are shaping new demand, said Chris Knight, a partner at KPMG UK, who warns of the impact on the vast majority who buy cars on three-year payment plans. Consumer credit gets more expensive due to higher interest rates, so some consumers will delay buying a new car altogether. Some customers facing increased outgoings may question the affordability of their car payments. In September, all-electric battery vehicles as well as plug-in hybrids accounted for more than 50,000 new registrations, or about 22 per cent of the market. Nearly 250,000 cars have been sold in the UK in the first nine months of this year, of the one million plug-in cars sold in the UK.
Electric vehicles are a small fraction of the UK's 40 million cars, indicating that electric vehicles have joined the mainstream ahead of the proposed ban on the sale of cars with petrol or diesel engines from 2030.
The mathematics of the new segment means that its growth will eventually be pegged back, but the latest data shows a slowdown in take-up for vehicles that tend to cost between 50 per cent and 100 per cent more than an equivalent conventional model.
With nearly 250,000 electric cars sold in the year to date, that is a year-on-year growth of 17 per cent. The 50,000 sold in September represents 9 per cent year-on-year growth.
Pure battery electrics have gone up 40 per cent in the year, while plug-in hybrids are down 15 per cent. The ending of subsidies for plug-in hybrids and the increasing availability of public charging infrastructure could cause the new technology to be adopted by motorists, because they don't need a petrol engine as back-up.
The demise of the diesel engine is being demonised by legislators, regulators and environmentalists. In September, there were only 19,000 new cars fitted with a diesel engine, and they represent only 8 per cent of the total market.