The share of EVs in the new car market is set to experience a significant growth. According to a report by Auto Trader, the number of petrol cars on UK roads has reached its peak this year. Auto Trader predicts a 40% decline in petrol-powered vehicles, with the number expected to decrease from 18.7 million in 2023 to 11.1 million by 2034. This shift is largely driven by the increasing adoption of electric vehicles (EVs). The publication forecasts a "seismic shift" towards EVs, with numbers rising from 1.25 million in 2024 to 13.7 million by 2034. The share of EVs in the new car market is projected to increase from 18% to 23% by 2025, although this falls short of the UK Government's Zero Emissions Vehicle (ZEV) mandate target of 28%. The ZEV mandate requires 22% of all new car sales to be battery-electric vehicles in 2024, with targets increasing annually to 80% by 2030 and 100% by 2035.Impact on Car Makers and Retailers
Car makers and retailers have expressed concerns about job risks and pressures on manufacturers due to the ZEV mandate. Stellantis, the owner of Vauxhall, recently announced the closure of its Luton van-making factory, affecting 1,100 jobs. The decision was influenced by the "stringent" UK zero-emission vehicle mandate. As reported by The Guardian, Auto Trader commercial director Ian Plummer said, "Peak petrol is a genuine landmark for the UK. We expect to see a seismic shift in British motoring over the next decade as the number of petrol cars falls by nearly half and EVs take a much bigger share. All this is happening against the backdrop of exceptionally strong used car demand despite a range of challenges for the industry, not least the introduction of ZEV targets, constrained supply, changing finance rules, and the budget."Used Car Market Dynamics
Despite the challenges faced by the new car market, the demand for used cars remains resilient. Auto Trader anticipates a 2% increase in used car sales next year to 7.7 million, still 14% below the pre-pandemic peak of 2.31 million registrations in 2019. Auto Trader's data indicates that the price gap between EVs and petrol or diesel vehicles is narrowing. One in three used EVs is now priced under £20,000, and many three to five-year-old EVs are priced competitively with their petrol or diesel counterparts.Consumer Behavior and Market Outlook
Motorist demand for new cars has been subdued due to cost-of-living pressures. Auto Trader anticipates a 2% increase in new car sales next year to 1.98 million. The transition to EVs is not without its challenges, but the industry is adapting. With the growing popularity of EVs and the implementation of ZEV mandates, the UK's automotive landscape is undergoing a significant transformation. Companies need to stay agile and adapt to these changes to remain competitive in the market.
