Though We Waited With Bated Breadth For The Year End Figures From The Society Of Motor Manufacturers And Traders (SMMT), To A Large Extent The Update Was a Foregone Conclusion!
The fast changing landscape on emission regulations and consumer lifestyle choices, have further fuelled the decline of diesel car registrations in 2019.
Diesel cars commanded a market share of 31.5% at the end of 2018, which was significantly lower than 2017. At its peak, the diesel market share was above 50%. However, in 2019, diesel car registrations reached a new low. The diesel market share shrunk a further 21.8% in 2019 to 25.2%. We certainly do not see this downward trend stopping anytime soon, and it is only a matter of time before diesel car registrations reach sub 5% market share.
2019 was a very challenging trading year for the UK automotive sector. The overall market was lower by 2.4% compared to 2018. Brexit certainly had a role to play, but other factors to include stricter regulations, further influenced the sector.
Petrol internal combustion engine (ICE) cars and battery-electric vehicles (BEVs) benefitted from the diesel fallout and will continue to do so in the years to come.
2018 to some extent had already witnessed the emergence of a relatively new theme ‘electric vehicles becoming mainstream’, but 2019 cemented the theme. In relation to electric cars, battery-electric vehicles (BEVs) witnessed the most pronounced increase. BEVs increased by a staggering 144% in 2019, compared to 2018. Total BEVs registered in 2019: 37,850 compared to 15,510 in 2018.
We believe pure electric car registrations would have been higher in 2019, if not for the limited BEV production volumes and long delivery times. Plug-in hybrid electric vehicles (PHEVs) witnessed a decline of 17.8% during the year. But this was expected as the plug-in car grant (PiCG) was terminated for PHEVs. Moreover, given the increase in range and performance for the latest BEVs, the ‘stepping stone’ role played by PHEVs was further diminished. Expect this to continue!
There are a number of factors that supported the increased EV adoption in the UK in 2019. Some of these include:
- Automotive manufacturers committing greater investment in their electrification strategy.
- The unveiling and launch of a number of new electric vehicles, to include the best selling Tesla Model 3 EV.
- Improvement in battery performance and range in new EV models, reducing the ‘range anxiety’ concern.
- Further scaling of EV charging infrastructure in the UK to include rapid charging points. As of January 2020, there are 29,500 connectors, 16,967 devices across 10,562 locations (ZAP MAP).
- Continued change is consumer lifestyle choices. This is really key. Individuals and families across the country are making choices that have a positive environmental impact. 2019 has been a year filled with protests related to climate change and this is being heard loud and clear across the UK. We should expect to continue to see significant increase in momentum on this theme and automotive manufacturers that do not cater for these fast changing attitudes are destined for failure.
- Stricter regulations from national governments to local councils. Bristol was the first city to ban diesel vehicles from the town centre in a bid to improve air quality. The ban will be limited to privately owned diesel cars during the day. Commercial diesel vehicles will be allowed, but will need to pay a surcharge. The scheme will commence in 2021. York has followed Bristol to ban all private car journeys within its medieval city to cut carbon emissions. Expect many more cities in the UK to follow!
- The continued support by the UK government for electric vehicles, via the plug-in car grant (PiCG) up to a maximum of £3,500.
In 2020, we will continue to witness higher EV adoption rates, further increase in production volumes, a greater number of pure electric models on sale and continued growth in EV charging infrastructure. Battery-electric vehicles are now mainstream. It is now only a matter of scaling the EV segment! We look forward to the 2020 year end report from the SMMT.
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