EVs Take 30.3% Share of The UK – Volkswagen Leading Brand

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January noticed plugin EVs take 30.3% share of the UK auto market, up from 23.0% year-on-year. BEVs grew quantity by 42% YoY, whereas PHEVs grew 5.5%. Plugin progress comes regardless of total auto quantity down 2.5% year-on-year, at 139,345 items. Volkswagen was the main BEV model in January.

January’s gross sales figures noticed mixed plugin EVs take 30.3% share of the UK auto market, with full electrics (BEVs) taking 21.3%, and plugin hybrids (PHEVs) taking 9.0%. These evaluate with YoY shares of 23.0% mixed, 14.7% BEV, and eight.4% PHEV.

This can be a good begin to the yr for BEVs. Recall that the UK began implementing a ZEV mandate in 2024, aimed toward setting steadily rising targets for the proportion of “Zero Emission” autos that producers should promote. In actuality this isn’t merely about BEVs – though these play the biggest half – however reducing emissions (nevertheless that’s achieved). 2024 set a headline goal of “22% ZEV”, with a small quantity of credit score given for PHEV, and a fraction given for the bottom emission plugless vehicles (e.g. HEVs). In apply, the “22%” translated right into a market-wide 19.6% share for BEVs in 2024, which – together with 8.6% PHEVs and 13.6% HEVs – nearly met the mixture goal.

2025 sees the headline ZEV goal ratchet as much as “28%”. Once more, with some wiggle room this can translate right into a BEV share goal of someplace round 24–25%. This being the case, January’s results of 21.3% is already a great consequence and means that the ZEV mandate “is working”. Regardless of this, unsurprisingly the trade foyer, the SMMT is claiming that producers will “struggle” to satisfy the goal this yr, and asking for extra carrots for his or her pockets. We will ignore most of that.

One legitimate level that the SMMT raises is questioning the logic of making use of a further £410 annual highway tax on BEVs priced above 40,000 – referred to as the “expensive car supplement”. ICE vehicles should pay this, however shouldn’t BEVs get a greater deal (since they nonetheless value greater than their ICE friends)? This additional £410 is because of apply from the beginning of April below present plans.

Common readers know that I’m all for extra reasonably priced BEVs, however that doesn’t imply that what’s at the moment a mid-market value household BEV costing £40,995 ought to moderately be taxed an additional £410 per yr greater than a BEV priced at £39,995. Not solely ought to BEVs arguably get a softer contact, however this “cliff” tax method – solely making use of the additional tax, in full, for BEVs priced above £40,000 – appears brainless. The tax fee ought to certainly be proportional (% primarily based) and may slide in, beginning at regardless of the MSRP is in extra of £40,000 (or e.g. beginning at £38,000 or no matter level is smart). That is the kind of calculation that Norway makes use of for VAT tax on “luxury” BEVs, for instance. Most international locations use a threshold-plus-percentage (and even progressive proportion) fee for revenue tax, so is that this extra refined method actually so “hard to understand” as is commonly claimed?

Simply as an illustrative instance, if the highway tax had been set at 4% for the portion of the MSRP value above £40,000then the £40,995 automobile would solely pay round £20 per yr in additional tax. Nevertheless a £45,000 would pay £200 additional, and that unique tax goal (of round ~£400 per yr) would solely be paid by BEVs costing round £50,000. Since this feels roughly the suitable value level for the place “premium” (or luxurious, when you choose) begins, given the place European BEV pricing is at at the moment, one thing alongside these traces is perhaps thought of to be truthful. Precise premium / luxurious BEVs costing £60,000+ would pay round £800+ per yr (although that is nonetheless lower than comparable ICE autos that is perhaps paying £1100 to 1500 per yr or extra). The thresholds and % might be tweaked over time if vital.

If one needed to be fairer nonetheless, since that is ostensibly a “road tax” used for highway prices and upkeepwhy not have a tax which progresses by automobile weight? Once more this tax might begin above a sure threshold, to incentivize vehicles that are as mild as is realistically possible for a easy economic system automotive. With as we speak’s security constructions, automobile weight begins at round 1,000 kg to 1,100 kg (for instance, the Dacia Sandero, the Toyota Yaris, or the Dacia Spring BEV). Then give a further “weight allowance” to BEVs, since batteries and energy electronics are nonetheless pretty heavy at this stage of the BEV expertise curve. Please talk about within the feedback if a sliding weight-based tax (maybe supplemented by annual mileage pushed) could be a fairer technique to pay for roads.

Again to January’s market shares, combustion-only powertrains had been each down in quantity YoY. Petrol-only quantity was down 14.4% to 70,035 items, and diesel-only was down 7.7% to eight,625 items.

Finest-Promoting BEV Manufacturers

In line with UK automobile licensing information (the DVLA by way of EU EVs), the Volkswagen model had the lead within the UK’s BEV market in January, with 8.2% share, simply forward of BMW (8.0%), and Mercedes (7.1%).

The UK’s long-term main BEV model, Tesla, was again in sixth spot in January with a bit of over 5.1% of the market, after one in all its largest ever pushes in December 2024 (20.9% of the market).

As I’ve talked about elsewhere, there’s a story being circulated round European (together with UK) mainstream media that Tesla gross sales are “crashing because of Musk”. No matter one might consider Musk, there’s nicely over 100,000 different folks working at Tesla. Cool-headed evaluation of the auto market and the conventional sample of gross sales is usually absent in such narratives, and the notion of “Tesla sales crashing” within the UK (e.g. this mainstream account) leaves out a lot of the important thing context. It leaves out Tesla’s large December BEV share within the UK, Tesla’s recurring quarterly unevenness, and that many potential patrons are ready for the brand new Mannequin Y to reach (in Might, within the case of the UK’s RHD market).

It’s true that Tesla’s two best-selling fashions now have far more competitors than a couple of years in the past, together with from decently competent, albeit easier autos, at cheaper price factors. The Tesla model’s market share (and quantity) might certainly see one other dip in full yr 2025 in Europe as an entire (following 2024’s dip versus 2023), however the Mannequin Y will virtually actually be Europe’s best-selling BEV mannequin once more. In spite of everything, it had close to 3x the volume of the highest non-Tesla in 2024as Jose has lately reported with onerous information.

Recall that after January 2024’s UK outcomes, when a few of our CT group had been ignoring Tesla’s recurring quarterly sample, ignoring the look forward to the refreshed Mannequin 3, and boldly forecasting that the BMW model would overtake Tesla within the UK in 2024? How did that work out? Not great. Sure, the lead of the Mannequin Y will steadily shrink over time, however don’t anticipate it to be outcompeted this yr (except Tesla disrupts itself with a less expensive mannequin). In fact, right here we’re speaking about manufacturers. When it comes to combining all manufacturers below their respective manufacturing group, Volkswagen Group has the lead within the UK, in addition to in Europe.

Within the January model rankings, Peugeot (5.8%) stepped up from 2024’s common share (4.7%), as did Kia (5.6% from 2024’s 3.9%). In the meantime, past Tesla, MG (2.9%) additionally misplaced share in January in comparison with 2024 (5.5%), however nobody is critically arguing that “MG is crashing”.  Because of the UK’s right-hand drive system, manufacturing and delivery is commonly in batches, so month-to-month variability like that is fairly regular.

Past this month-to-month variability, there are some hints at strikes by new fashions, although our information for that is at all times patchy, sadly. The Kia EV3 appears to have had its finest month but, with round 900 items in January. The Ford Explorer additionally had an honest month with round 650 items (although down from its December meet-the-ZEV-target push). The Dacia Spring maintained an honest quantity of round 350 items. On the premium finish, the brand new Volvo EX90 continued to ramp up, to round 60 items, and the brand new Audi S6 e-tron noticed round 140 items (together with RS6 variants).

Let’s test in on the 3-month rankings:

Given what we stated above about quarterly patterns and the extra month-to-month variability within the UK RHD market, this chart offers a greater image of the bottom actuality (although even right here, the late 2024 push to satisfy the ZEV mandate distorts issues – see the 2024 full year ranking for an extended common).

Right here, the highest 5 manufacturers are all the identical ones as in full yr 2024, although barely reshuffled and with an additional push (notably in December) having come from Volkswagen to satisfy the ZEV mandate deadline. Mini is larger than its common, once more because of a giant December push, and that’s much more the case for Ford. Many of the others are usually not too far off their long run averages, however once more – check that 2024 ranking for extra context.

When we have now the total Q1 information, and might evaluate it to the 2024 This autumn information, we will see extra clearly which manufacturers had been within the largest rush to satisfy the 2024 ZEV mandate.

Outlook

January’s 2.5% YoY drop in auto market quantity is inside regular variation. The broader UK economic system is simply lukewarm, although higher than some neighbours, with newest Q3 2024 GDP data showing 0.9% YoY growthand This autumn’s consequence at the moment anticipated to be 1.0%. Inflation shaved to 2.5% in December (newest), and rates of interest have simply lowered from 4.75% to 4.5% over the previous week or so. Manufacturing PMI remained detrimental in January, at 48.3 factors, although was up from December’s 47.0 factors.

The ZEV mandate launched in 2024, amidst a lot grumbling from intransigent legacy auto, did in the long run end in an honest bump in BEV share, and accelerated the transition in comparison with many neighbouring European international locations. With 2025’s tightening mandate, we have now to guess that it’s going to even be efficient once more this yr, and little question amidst much more grumbling.

What are your ideas on the UK transition to EVs? Are you planning to get an EV in 2025 or are you continue to ready for “future” specs? Please soar into the dialogue under to share your perspective.