UK Auto Market Struggling But Full Electrics Still Growing

In the UK, plug-in electric vehicles took a 20.2% share of the auto market in August, up from 18.3% year-on-year. Full electrics saw decent growth in share, while plug-in hybrids lost share, hurting the combined result of add-ons. Overall car volumes were 68,858 units, a slight improvement year-on-year, though still 18.8% below pre-2020 seasonal norms. The BMW brand accounted for the lion’s share of full electric sales in the month.

The August combined plug-ins result of 20.2% comprised 14.5% full electric (BEV) and 5.6% plug-in hybrid (PHEV). This compares with respective shares of 10.9% and 7.4% a year ago.

In terms of unit volumes, BEV sales grew more than 35% year-over-year to 10,006 units. PHEVs, on the other hand, lost 23.1% of volume year over year, to just 3,884 units. Similar weighting trends are occurring between the two classes of plugins in other European markets.

Diesel-only vehicles lost just over 10% of sales volume year over year, while gasoline-only powertrains were up about 7% in volume. Non-plug hybrids, including mild hybrids, lost just over 10% of volume year over year.

Best-selling BEV brands in the UK

As usual, we have BEV brand share data from New Automotive based on UK Vehicle Licensing Agency (DVLA) records. Although the data excludes vehicle registrations with personalized plates, the ratios should fairly represent the overall BEV brand share of new sales.

In August we see that BMW brand BEVs ranked first in share of new registrations, at 11.4%, ahead of the Tesla and Volkswagen brands.

BMW’s move to leadership stemmed in part from a slight growth in delivery volumes compared to its average in recent months, but more so from the underperformance of its rivals, both Volkswagen and Tesla (and others) compared to his recent volumes. .

Obviously, a single month doesn’t necessarily tell us much, so let’s take a step back and look at the results of the last 3 months across all brands:

Compared to the result 3 months ago, Tesla still leads the recent rankings, thanks to its huge delivery push in June, well ahead of a bunch of brand laggards, Hyundai, Kia and Volkswagen.

Hyundai’s second place represents a strong improvement from fifth in the March-May period. Here is a summary of significant climbers compared to brand rankings from 3 months ago:

Others lost position compared to three months ago:

Most of the other brands in the top 20 zone only changed ranks one or two places, if at all.

Finally, let’s step back again and look at the relative performance of the different automobile manufacturing groupsin terms of BEV’s market share in the UK.

Compared to the result 3 months earlier, Tesla has dropped two places from 1 to 3, allowing previous runners-up Volkswagen Group and Hyundai Motor Group to each move up one place to 1 and 2, respectively. Volkswagen Group now has a decisive advantage, well ahead of Hyundai Motor Group.

Positions 4 and 5 remained the same, still held by Stellantis and BMW Group, although with Stellantis far ahead. Outside of the top 5, Renault-Nissan rose from 8 to 6, trading places with the Mercedes Group. SAIC, owners of the MG brand, came in seventh place.

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The car market in the UK and across Europe mirrors the broader economy, and things are not looking too good at the moment. The latest inflation data (July) puts the UK at an annual rate of 10.1%, compared to 2% year-on-year, which is the highest rate in 41 years.

Much of this is due to energy price inflation (and supply shortages), with gas in the range of 240 to 640 pence sterling per therm in the last two months, compared to the range of 100 at 110 pence, year on year. Similarly, electricity has been in the range of £260 to £560/MWh in the last two months from a constant £40, YoY.

As I mentioned in my France reportin many parts of Europe, in times of crisis there is a historical precedent for government to subsidize energy prices for households, to avoid poverty and social unrest. However, if energy supply is inherently limited, allowing households to consume close to their usual volumes obviously means that someone else has to fall short and/or pay even higher prices, and in the UK, these are the commercial energy users.

A well-known current example is that pubs in the UK are seeing at least a 300% to 400% increase in energy bills compared to normal levels (and more than 500% in some cases). Because of this, 70% of UK pubs currently do not expect to be able to remain economically viable through the coming winter..

Local pubs are obviously an identifiable example of a small business, but the same energy prices also affect all other business users, putting small and medium-sized businesses at risk. immense financial pressure. Because “borrowing Peter to pay Paul” isn’t really a solution, the UK government is now talking about trying to protect both in homes and businessesand implement a widespread freeze on energy bills.

However, since energy prices are fundamentally a reflection of limited supply (rather than higher than normal demand), price caps and subsidies alone will not necessarily solve the underlying problems of energy scarcity. .

As a result of energy inflation, general inflation and other economic headwinds, forecasters now see recession looming in the ukwhich will inevitably reduce consumer spending and further dampen new car sales.

Even with capped electricity prices, the economic advantage of driving electricity over combustion fuel is no longer as great as it used to be, but if cheap nightly rates can still be found (UK consumers, please rate this below), the economics long term is still in favor of complements. At least the economic calculation for those who can still afford a new car.

So this should mean the plugins still look decent. relative demand in the coming months, that is, the part of new sales, even if the total volume of car sales slows down drastically. We’ll have to wait and see.

UK Automotive Industry Association the SMMT has recently said “Spiraling energy costs and inflation on top of sustained supply chain challenges are piling further pressure on the auto industry’s post-pandemic recovery, and we urgently need the new Prime Minister to address these challenges and restore confidence and sustainable growth.”

What do you think about the UK consumer economy and the outlook for the car market in the coming months? Will plugins continue to steadily increase their share? Hit the comments section below to share your perspective.

 

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