March saw plugin EVs take 22.9% share of the UK auto market, barely up from 22.4% year on year. Full electric share fell, while plugin hybrid share grew. Overall auto volume was 317,786 units, up 10% YoY, though still far below pre-2020 norms. The UK’s leading BEV brand was Tesla, ahead of BMW.
March’s totals saw combined plugin EVs at 22.9% share, with full electrics (BEVs) taking 15.2% and plugin hybrids (PHEVs) taking 7.7%. These compare with YoY shares of 22.4% combined, 16.2% BEV and 6.2% PHEV.
This is a poor showing for BEVs, losing 1% share of the market, and up in volume just 3.8% YoY, against broader market growth of 10.4%.
The brands shedding volume YoY were Tesla, MG, Volkswagen, and Polestar. This could be due to temporary logistics ebb-and-flow, or it could be demand falling for these brands. Other things being equal, demand falling might seem unlikely, especially in the case of MG, which offers the UK’s best value BEVs.
As we discussed in the Norway report, however, a cooling of demand could simply be an effect of the UK’s broader economic recession. The “relatively good value” BEV brands most likely to be bought by ordinary folks include MG at the lower end of the pricing spectrum and Tesla in the middle of that spectrum. Ordinary folks, including those who were already struggling economically, tend to get hit the hardest by recessions and hold off from making large purchases. The elevated sticker price of BEVs can make them particularly vulnerable in a spending squeeze, more than lower-priced ICE cars.
This might also make sense of which brands gained volume. A few brands anyway have to grow sales to meet the 22% ZEV mandate, or face large fines. Of the brands which were already comfortable ahead of the mandate, BMW and Mercedes brands stand out as nevertheless increasing their BEV sales YoY at a decent clip. This may be because the buyers of these brands are typically less perturbed by recessionary forces than the median consumer. This is a hypothesis — let me know your thoughts, and we will see if the pattern in the months ahead appears to support this, or not.
A modest counterbalance to the weakness of BEVs was the relative strength of PHEVs, with 37% YoY volume growth, and claiming an additional 1.5% share of the market, with 7.7% share. HEVs saw volume growth of 19%, ahead of the market average, though only half the rate of PHEVs.
Combined combustion powertrains saw their share fall to 63.0%, from 64.6% YoY. Their volume grew 9.3% YoY, underperforming the market average.
Best Selling Brands
Despite registering less volume than March 2023, Tesla remained the UK’s best selling BEV brand for the month.
The Model Y took 80% of Tesla’s volume, with the Model 3 just 20%, a ratio of 4:1. Their normal ratio is closer to 2:1 or 3:1, but Tesla has said that the Model 3’s supply to Europe from Shanghai has recently been affected by shipping delays, due to the troubles in the Red Sea region.
BMW remains solidly in second place, and Mercedes achieved third, switching places with MG since last month.
Two notable climbers were Honda (which we will discuss in the next section) and Jaguar, in the 14th and 15th spots.
March is usually the UK’s biggest month of the year, at around 2 or 2.5× the volume of a normal month, but Jaguar sold over 5× its typical volumes. This appears to be because they are both launching the trim-refreshed model of the I-Pace, and also heavily discounting the remaining stock of the outgoing older trim. There is no technology refresh of the re-trimmed I-Pace, since this will anyway be its last year on sale, and an all-new BEV will launch in 2025.
Let’s now look at which brands have been making moves in Q1 2024 compared to Q4 2023:
The top 5 brands are only slightly shuffled since Q4 last year, with Mercedes and Audi switching places. There are more significant changes further down the ranks.
The Laggards Doing The Bare Minimum
We’ve noted over recent months that several laggard brands were holding back BEV deliveries in late 2023 (typically the annual peak for BEV market share), to get a head-start on the strict new ZEV mandate for 2024.
Now that the data is in, let’s highlight the most blatant offenders:
- Toyota went from delivering under 600 units in Q4 2023 to around 3,500 units in Q1 2024, a change of 6× in volume. Their BZ4X did not get 6× more attractive over the period. They jumped from 35th rank (almost last) in Q3 to 10th in Q1.
- It was a similar story for sibling brand Lexus, increasing volume from around 100 units to 700 units across the period, climbing from 34th to 25th.
- Honda was similarly egregious, going from around 280 units in Q4 to around 1,750 in Q1 (and 15th spot).
- Almost equally skewed were the Stellantis brands, collectively going from around 2,650 units in Q4 to around 9,200 in Q1. Worst amongst them was Peugeot, going from 20th place to 7th between the periods.
- Ford was almost as bad, going from around 500 units in Q4 to 1,200 in Q1.
What do I mean by “laggard” brands in the BEV context? I mean brands which are deliberately doing the bare minimum required by the regulations to make the transition to BEV.
If you want to change their stance and get them to stop dragging their feet, my advice would be not to support the current strategy of these brands with your hard earned money.
Outlook
Despite the growing auto market, the economy in the UK remains weak. The latest GDP data is from Q4 2023, at negative 0.2% growth YoY. Headline inflation reduced to 3.4%, with interest rates unchanged at 5.25%. Manufacturing PMI improved to 50.3 points in March, from 47.5 points in February. Consumer confidence remains low at negative 21 points.
The UK auto industry body, the SMMT (which represents the laggards as well as others), said: “Market growth continues, fuelled by fleets investing after two tough years of constrained supply. A sluggish private market and shrinking EV market share, however, show the challenge ahead. Manufacturers are providing compelling offers, but they can’t single-handedly fund the transition indefinitely. Government support for private consumers — not just business and fleets — would send a positive message and deliver a faster, fairer transition on time and on target.”
I agree that the playing field between private consumers and fleet buyers should be level, but the UK is the inventor of corporate capitalism — the idea that big fleet companies would not get more favourable tax and benefit terms than private individuals is laughable.
The SMMT wants to push the re-introduction of incentives for consumers partly because they can charge higher prices to individual consumers than they can to fleets. The latter always demand significant discount deals for their bulk purchases.
Incentives for consumers would also allow manufacturers to effectively charge more for vehicles, which of course is wanted by all SMMT members. The laggards would also be helped by incentives boosting relative demand for their BEVs, which have to meet the ZEV mandate threshold of 22% “zero emission vehicles” (with some wriggle room in practice) in full year 2024.
What are your thoughts on the UK’s transition to EVs? Please join in the discussion below.
