With the year’s first full month of showroom openings, new car registrations in May reached 156,737 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). The total represents an almost eightfold increase on the same month last year, but is down -14.7% on pre-pandemic May 2019, and -13.2% on the 10-year May average.2
Uptake was in line with the most recent industry outlook, published in April, which sees the sector anticipating around 1.86 million registrations by the end of the year – with 723,845 achieved so far.
Against a more positive economic backdrop – including OECD forecasting a 7.2% increase in UK GDP during 2021 – fleet registrations grew more than twice as fast as private purchases in May.3 Large fleets accounted for 50.7% of all new vehicles hitting the road, demonstrating improving business confidence compared to the same month last year.
In terms of segments, dual purpose vehicles saw a small decline in market share in the month, down to 26.7%, leapfrogged by lower medium cars which rose to 27.8%. Superminis remained Britain’s most popular car choice, with a 31.1% share.
Battery electric vehicle (BEV) market share declined from 12.0% a year ago to 8.4% in the past month, although the May 2020 performance was distorted by lockdowns when new cars could only be purchased through click and collect or delivery, giving rise to variable purchasing patterns.
Looking more broadly across 2021, plug-in vehicles now comprise 13.8% of new car registrations, up from 7.2% a year earlier, with the most rapid growth seen in plug-in hybrid (PHEV) derivatives. Pure petrol and mild hybrid petrol cars so far account for 60.4% of registrations, while pure diesel and mild hybrid diesels took a 18.0% share year to date, compared to 64.6% and 22.4% last year.
Meanwhile, total registrations for 2021 sit at 296,448 fewer units, or -29.1% less, than the average recorded across January to May during the last decade, evidence of the scale of the recovery still needed given the impact of Covid on the market.
Mike Hawes, SMMT Chief Executive, said: “With dealerships back open and a brighter, sunnier, economic outlook, May’s registrations are as good as could reasonably be expected. Increased business confidence is driving the recovery, something that needs to be maintained and translated in private consumer demand as the economy emerges from pandemic support measures. Demand for electrified vehicles is helping encourage people into showrooms, but for these technologies to surpass their fossil-fuelled equivalents, a long term strategy for market transition and infrastructure investment is required.”
Andrew Hurdle, Head of EV at British Gas Business, said: “Today’s figures reaffirm that zero-emission vehicles are fast becoming the top choice for businesses and individuals, but there remains a great deal of work to do to get the UK ready for the 2030 ban on new ICE vehicle sales.
“Our latest research found that businesses are set to invest £16 billion in EVs over the next 12 months and, while this planned investment is encouraging, some significant barriers to widespread adoption remain, including a lack of public charging infrastructure across large parts of the country.
“It’s crucial that we continue to accelerate the roll out of charge points across the UK, both on streets, in homes and at businesses. It’s equally vital that we ensure that these systems are smart and flexible to minimise the amount of upgrading works necessary to manage growing demand. The £300m charging infrastructure boost from Ofgem will be welcomed by many, but much higher levels of investment will be needed to accelerate EV adoption as the 2030 deadline approaches.”
Jamie Hamilton, automotive director and head of electric vehicles at Deloitte, said:
“With showrooms open for the whole month, and with both business and consumer confidence on the rise, it is disappointing to see that sales of new cars failed to return to pre-pandemic levels in May. Today’s figures suggest that the expected post-lockdown recovery might be slower than first thought.
Semi-conductor shortages continue to bite
“The ongoing global shortage of semi-conductors means that there is little respite for the sector and disruption is expected to last at least through to the end of the year. Manufacturers have responded so far by employing a variety of tactics to minimise both near- and long-term damage. This includes shifting assembly to more in-demand products, bypassing the installation of some parts and modules until a later date, and securing alternate sources of semi-conductor supply.
“Some manufacturers are struggling to meet consumer demand and, in some cases, are significantly reducing production forecasts, cutting hours, and even idling factories.
“For dealerships, stock is visibly low for some and consumers themselves are also feeling the impact, waiting longer than usual for delivery of their new vehicles. As a result of delays, some consumers are now turning to the used car market, but stock is also an issue here so it is no surprise that we have seen the value of used cars grow significantly over the last month.
EVs continue to outperform the market
“Electric vehicles continued to see significant growth in May, with battery electric and plug-in-hybrid achieving a combined 15% market share (8% and 6%, respectively). This put them ahead of pure diesel yet again, which captured just 10% of the market.
“Almost a quarter of cars produced in the UK are now electric in some form, demonstrating the demand for ultra- low and zero emission vehicles. As this figure rises, we expect to see increasing calls for battery production to come to the UK. The majority of the world’s batteries are currently produced in Asia, but any cost of transportation reduction would be welcomed by many UK manufacturers.
“Although future EV growth is almost guaranteed, the rate required to achieve 100% penetration by 2030 will only happen if consumer concerns about charging infrastructure are put to rest. Many will find reassurance in the investment recently announced by the government towards rapid charging. However, there still needs to be a longer term strategy in place, to encourage consumers to go fully electric.”
Meryem Brassington, electrification propositions lead at Lex Autolease, said:
“Today’s continued rise in EV registrations shows the significant progress we’re making along the Road to Zero, with figures up 822% compared with the same period last year. This is particularly encouraging given the BEV supply chain challenges the industry is currently facing, and the recent changes to plug-in grants.
“However, the figures mask a worrying trend. There were more than 376,000 fewer new car registrations in the five months to May than in the same period of 2017. That’s 376,000 cars on the road today that are older and less efficient. If replacement cycles are extended further by businesses reconsidering their fleet mileage as Zoom meetings replace face-to-face, this could seriously offset the gains made by the growth in EV adoption.
“As ever, the right infrastructure and fiscal incentives to drive EV adoption are crucial as we continue on the march towards net zero. Equally, it’s just as important to create the conditions for a strong second-hand market to help drivers across the affordability spectrum make the leap from older, traditionally-fuelled vehicles to used EVs.”
1 Average Jan-May 2010-2019 registrations: 1,020,293
2 May 2019 registrations: 183,724; Average May 2010-2019 registrations: 180,489
3 OECD Economic Forecast summary, May 2021 (https://www.oecd.org/economy/united-kingdom-economic-snapshot/)