The Chief Executive of the Society of Motor Manufacturers & Traders (SMMT) has said that a suitably ambitious intervention by government to match industry’s investment in electric vehicle (EV) manufacturing is essential to drive demand.
In his latest CEO update on Friday, Mike Hawes said:
In an eventful week, SMMT published its latest data on the UK’s new car market with positive news that EV demand grew almost a quarter in October. It’s a much needed boost, driven by a swathe of new models and unprecedented industry discounting, meaning one in five new EV models now has a lower purchase price than the average petrol or diesel. In spite of this, EV demand did not reach the levels mandated, even in an overall market down by more than 9,000 units.
The challenge persists in both the new car and light commercial vehicle markets, but with the cost of manufacturing EVs remaining stubbornly high, industry cannot successfully or indefinitely plug the gap. A suitably ambitious intervention by government to match industry’s investment is, therefore, essential – one that must offer private consumer incentives, mandate chargepoint rollout, and make public charging more affordable – else its expectation that the mass market will shift at world-leading pace will flounder. If such support isn’t forthcoming, there must be an urgent review of light vehicle markets’ performance and their regulatory mechanisms.
SMMT’s used car sales figures, also out this week, brought more positivity, showing record numbers of pre-owned EVs are changing hands. Quarter three BEV sales grew by more than half from a year ago to represent one in 37 used transactions. The demand is there at these lower price points, but supply depends on a healthy new car market, making the need for new car purchase incentives even more critical so that all motorists on every budget can benefit.
Industry recognises the constraints on the public purse but a strong automotive sector – one that’s globally competitive – can be a major driver of investment and economic growth.
Manufacturers try to base operations close to their largest markets so a vibrant market can put a country in the driver’s seat for major automotive investment. But strong, free and fair trading relationships are also crucial. SMMT was pleased, therefore, to host its members at a networking event in Brussels with Caroline Read, UK Deputy Ambassador to the EU, to discuss a strengthened relationship between the UK and what is – by some distance – our industry’s biggest trade partner.
But our second largest trading partner is the US, with reciprocal trade and investment creating high-value jobs, and boosting our economies. It is important, therefore, that the UK works with the new Trump administration to continue to enhance this cooperation, ensure we have that free and fair trade and seek mutual benefits across the Atlantic. This will be a priority for the UK Government and, indeed, for many others.
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