Diesel demand soars as drivers move away from EVs forcing major brands to spend £2bn on discounts
Car manufacturers can be fined £15,000 per vehicle if they fail to meet ZEV rules
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Demand for diesel cars has grown by nearly a fifth despite the UK looking to move away from the fuel type in favour of electric vehicles.
Private demand for new diesel cars was up by 17.2 per cent compared with the same month in 2023 showing an increase of roughly 1,369 units.
This compares to the slower progress electric cars are seeing with 3.7 per cent year-on-year rises equivalent to 430 units, according to the Society of Motor Manufacturers and Traders (SMMT).
The overall number of new cars registered last month rose by 1.1 per cent year on year to 275,089 units, thanks to the release of new number plates at the start of September.
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Sales of new petrol and diesel cars will be banned from 2035
PAHowever, September was a better month for overall battery electric new car registration volumes with SMMT data recordingaround 56,362 more units.
Growth was driven by purchases of new vehicles that could be owned or leased by businesses or other organisations and benefit from Government incentives.
SMMT chief executive Mike Hawes said: “September’s record EV performance is good news, but look under the bonnet and there are serious concerns as the market is not growing quickly enough to meet mandated targets.
“Despite manufacturers spending billions on both product and market support – support that the industry cannot sustain indefinitely – market weakness is putting environmental ambitions at risk and jeopardising future investment.”
Consumer demand in the private market fell by 1.7 per cent in September, while the smaller business sector saw volumes decrease by 8.3 per cent.
Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said: “Electric vehicle sales surged in September. Record discounts are driving the interest as brands and retailers do all they can to stimulate sales, showing once again just how sensitive the market is to financial incentives, and the importance of overcoming the current EV cost barrier.
“There’s still much to do to drive further levels of interest and sales – and discounts can only last so long. Other measures are needed to help buyers make the switch to electric cars which still carry a 30 per cent price premium over their ICE (internal combustion engine) counterparts.”
The SMMT noted that car makers are on track to spend at least £2billion on discounting electric vehicles this year to help offset the “underlying paucity of demand”.
As part of the Zero Emission Vehicle mandate, manufacturers have a minimum of 22 per cent of sales come from electric cars by the end of the decade - a figure which is currently at 20.5 per cent.
The SMMT and senior UK leaders at major vehicle manufacturers have called on the Chancellor Rachel Reeves for urgent support to help more drivers make the switch to electric.
The experts also insisted that halving VAT on new EV purchases and reducing VAT on public charging from 20 per cent to five per cent would make a difference for drivers who still view EVs as too expensive.
In the letter to Reeves, manufacturers wrote: “We appreciate the severe constraints on the public purse, but deliver this support to consumers and the benefits are myriad: a thriving market, enhanced consumer choice and affordability, investment attractiveness, high-value job creation, cleaner air, quieter streets and economic growth.
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Diesel car sales have seen year-on-year increases
PA“We know your Government is committed to a vibrant and competitive UK automotive industry. With the right measures, the right consumer support, we can fix the foundations of this transition and with it deliver the biggest technology transition ever attempted, and the economic growth and environmental improvements that should be non-negotiable.”
The signatories warned that without urgent support, manufacturers would “likely miss” targets set by the zero emission vehicle mandate which would result in hefty fines from the Government of £15,000 per polluting vehicle sold above the limits.
The letter added that “these are not consequence-free choices”, and it would be “the consumer who pays” the price in the end.