Retail EV demand not high enough for 22% target

Retail new car demand for electric vehicles is not yet at a level where the industry will hit the government’s proposed 22% ZEV Mandate target for 2024, according to new research for sister publication Auto Retail Bulletin.

The latest Auto Retail Barometer, which surveys industry sentiment every six months, reveals that more than 60% of new car retailers are experiencing retail battery electric vehicle demand below 15%. For more than a third, retail demand is running at less than 10%.

The demand for fleet EVs is strong thanks to favourable company car taxation policy. However, there are almost no incentives for retail buyers to go electric.

The ZEV Mandate target proposed for next year includes a hefty £15,000 penalty applied to every car that a manufacturer sells that falls short of the 22% EV mix.

Commenting on the level of retail demand across the industry, SMMT chief executive Mike Hawes told Auto Retail Agenda: “The industry will have to meet the targets, no one wants to pay the high cost of failure to comply, and no one wants to trade [EV credits] so there needs to be more flexibility in the regulations.

“All manufacturers can do is put the vehicles on the market, but government needs to incentivise them and one particular approach would be to sort out the VAT on public charging. At the end of the day, the consumer will vote with their wallets.”

Asked if used car incentives would help consumer demand, he added: “Any measure to support the uptake would be good. Money on the bonnet of new or used would help. Currently the government’s approach is to force the new car market into ZEVs and that’s their route to used ZEVs.”