In the UK automotive scene, the month of March marked a slight increase in the market share of plugin electric vehicles (EVs), capturing 22.9% compared to last year’s 22.4%. While the overall count of automobiles sold rose to 317,786 units, indicating a growth of 10% year-on-year (YoY), it still trails the numbers seen in the years prior to 2020. Amongst brands, Tesla maintained its dominance as the top battery-electric vehicle (BEV) seller, outpacing BMW.
Shifts in EV Market Shares
The detailed numbers present a closer look at the market dynamics, with BEVs constituting 15.2% and plugin-hybrids (PHEVs) securing 7.7% of the market share. Despite the overall increase in plugin EVs, full electric models observed a dip, losing 1% market share and increasing in volume by a mere 3.8% in comparison to the broader market’s 10.4% expansion. The changes in volume and market positioning of brands such as Tesla, MG, Volkswagen, and Polestar suggest either a temporary disruption in logistics or a potential decline in demand.
Likewise, the narrative around brands like MG, known for offering cost-effective BEVs, and Tesla, that sits mid-range in terms of price, may reflect the impact of the UK’s economic recession where the average consumer is more affected and thus hesitates in making large purchases such as electric cars.
Brand Performance amid Economic Pressure
However, certain luxury car brands like BMW and Mercedes surged ahead in BEV sales YoY, possibly due to their customer base being less susceptible to economic downturns. This echoes a trend observed in the U.S., where premium brands are gaining a larger slice of the EV market share as consumers in this segment perceive electric vehicles as more competitive.
Contrasting the weaker performance of purely electric cars were the plugin hybrids, which saw a notable 37% increase in volume YoY, capturing an additional 1.5% of the market. Meanwhile, hybrid electric vehicles (HEVs) experienced a 19% growth in volume, still lagging behind PHEVs but ahead of the market average.
As EVs moderately increased, the combined share of traditional combustion powertrains diminished to 63%, though their volume rose by 9.3% YoY, slightly behind the market growth.
Best Selling Brands and Emerging Trends
Tesla, despite reduced volume compared to the previous year, remained the top dog in the UK’s BEV market for March. The brand saw a shift in their sales with the Model Y and Model 3, affected by supply chain issues. Other notable brands finding success included BMW securing second place, with Mercedes and MG trading spots for third.
The report also highlights Honda and Jaguar making noteworthy progress due to product updates, discounting prior models, and launching refreshed versions.
The Strategic Play of Automotive Laggards
Several brands were noted for restrategizing their BEV deliveries, potentially as a response to the new ZEV mandate for 2024. Brands like Toyota, Lexus, Honda, and those under Stellantis (including Peugeot) significantly increased their deliveries at the onset of 2024, evidencing a shift in strategy to meet regulatory requirements while possibly minimally investing in BEV progress. Ford’s increase in units also aligns with such a trend.
The term “laggard” brands, in this context, refers to those doing just enough to meet legislative requirements and the notion that consumers can potentially influence these brands’ stances by directing their money elsewhere.
Economic and Industry Outlook
While the UK auto market grows, the underlying economic conditions remain challenging, with a contraction in GDP and low consumer confidence. Nevertheless, manufacturing showed improvement in March. The Society of Motor Manufacturers and Traders (SMMT), representing both progressive and conservative manufacturers, highlights the growth driven by fleet investments and underscores the struggle with a weakening EV market share and a sluggish private market.
The SMMT advocates for governmental support to incentivize private consumers, which could also inadvertently support manufacturers by enabling them to charge higher prices to individuals as opposed to fleets. It’s suggested that such incentives would not only level the playing field but also potentially assist the so-called laggard brands in meeting impending EV mandates.
