EY shares insight on SMMT data and new EV registration

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How do EVs rank in new car registration figures?

Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today — including global developments on EV uptake, issues and statistics. 

The Society of Motor Manufacturers and Traders (SMMT) releases information and data about the automotive industry regularly, giving insight into trends, and allowing predictions to be made on upcoming trends. 

EY provides insight into the new car registration figures for October 2023 provided by SMMT:

“Despite October being a historically slow month for new car sales following the September plate change, 153,529 new car registrations were recorded last month, marking a 14.3% increase over October 2022. This was also a 15th straight month of growth and the first month that has exceeded pre-pandemic sales – a clear sign of the UK auto industry’s continuing resilience,” David Borland, EY UK & Ireland Automotive Leader, comments. 

Before joining EY around five years ago, Borland spent over a decade working for General Motors and sitting on its UK board. With a background in electrical engineering, Borland has worked for companies including Jaguar Land Rover and Siemens. He volunteers in his community as a Parent governor and chair of resources committee at Redbourn Primary School and as coach for the under 12s team at Harpenden Rugby Club. 

“Once again, growth was underpinned by significant progress for alternative powertrain technologies, with Plug-in Hybrid Electric Vehicles (PHEVs), Battery Electric Vehicles (BEVs) and Hybrid Electric Vehicles (HEVs) enjoying the lion’s share of growth last month. Another trend that continued was the fleet market seeing the most substantial growth, while private sales flatlined and small business sales declined.

“Despite Battery Electric Vehicle (BEV) sales seeing an increase in October, consumer demand is being tempered by rising prices, concerns on residual values and challenges related to high interest rates in a market where nine in 10 private purchases are financed. This was demonstrated with BEV market share falling below 16% for the first time in 6 months.

“The industry will undoubtedly pay close attention to this month’s Autumn Statement to see what incentives could be introduced in a bid to boost consumer appetite for EVs, particularly after the Internal Combustion Engine (ICE) vehicle sales ban was pushed back to 2035.”

“Discussions surrounding new rules of origin have been the topic of extensive debate, with the legislation planned to take effect on January 1, 2024. According to the SMMT, this tariff's impact could be more than £4bn. The consequences of the move would be to escalate the cost of an EU-manufactured Electric Vehicle in the UK, and the cost of a UK-manufactured vehicle in the EU by nearly £3,500 per unit. This undoubtedly presents a significant challenge for OEMs, particularly if this legislation is not deferred or altered to help facilitate a smoother transition,” says Manu Varghese, from EY’s UK & Ireland Advanced Manufacturing and Mobility team. 

Varghese joined EY in 202, having previously held the position of Chief Financial Officer at Hira Industries LLC, and spending over a decade at Ford.

“The automotive industry is undergoing a profound shift, the likes of which has not been seen in recent years. The impact of this transformation is expected to be significant, affecting the automotive supply base, dealer networks and the broader retail landscape. While the supply side has gradually returned to normal, a decline in market share for BEVs is predicted for Q4 2024 as manufacturers find ways to address the Zero Emissions Vehicle (ZEV) Mandate from Q1 next year. Added to that are global OEMs’ predictions that the industry may face a potential Q3 earnings decline, resulting from union pay discussions and possible industrial action.

“Moreover, to maximise the chance of a positive performance for the next quarter, stakeholders should look to prioritise attracting and retaining the right employees, pricing cars appropriately, and aiming for low inventory levels to keep costs down and protect balance sheets.”

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