CEO Update

EV sales soar in October as UK hosts COP26

05 November 2021 #CEO Update

There can be no hiding the fact that the new car registration figures in October – which fell for the fourth consecutive month – were a major blow to the sector, albeit one that was expected. The performance reflects the challenging supply constraints, with the industry continuing to battle against semiconductor shortages and increasingly strong economic headwinds as inflation rises, taxes increase and the Bank of England forecasting the effects of the global pandemic likely to be visible for some time. Nevertheless, with only 106,265 units sold over the course of the month, -24.6% less than in 2020 and therefore the worst performing October since 1991, it is deeply disappointing.

The good news, however, was that, as Britain hosts COP26 and seeks to align the world in committing to achieving net zero and limiting the global average temperature rise to 1.5 degrees above pre-industrial levels, electric vehicles continue to buck the trend with soaring registrations, buoyed by an ever-growing number of models available to consumers.

During last month, the number of BEVs registered equalled their September market share of 15.2%, while PHEVs equated for another 7.9%. It means that plug-in vehicles account for 16.6% of all new car registrations so far in 2021. Indeed, such is the surge in uptake of plug-in vehicles during 2021, SMMT now estimates that more electrified vehicles will be registered over the course of this year than were registered across the whole of the last decade combined. This is thanks to massive investment by industry as well as long standing government incentives, in particular the plug-in car grant, which has helped the market move from just 188 new plug-in cars sold in 2010, to almost 300,000 expected in 2021.

With next year looking brighter, and even more new zero emission models expected, achieving net zero by the desired date is possible. Whether this moves from “possible” to “certain” or even “probable”, however, depends on the ongoing provision of incentives to help private consumers, not just business buyers, make the switch and significant investment in public charging infrastructure. Backed by the ingenuity and innovation of the automotive sector, we can then deliver zero-emission mobility that is accessible and affordable for all.

With COP26 in full flow in Glasgow, SMMT has been heavily engaged in International activities. We have been delighted to host the Governor of Illinois together with a delegation of local businesses keen to see the US State become a centre of excellence in EV development and take up. Also in town has been an automotive delegation from Mexico, a key automotive country and one with which the UK is building stronger links with. Added to this, SMMT was in Dubai this week, speaking at the inaugural Hypermotion conference and meeting representatives of both the Emirate and the local business community who are planning to change radically the approach to mobility. There will be many opportunities for tech and mobility businesses in the UAE and SMMT will be looking to create the necessary links for UK automotive companies to take advantage.

Finally, there is just over a week left to apply for the SMMT Apprentice Support Programme. This initiative seeks to support those apprentices in the industry who may be in danger of redundancy given the Covid-19 related business pressures the sector is experiencing. The Programme will cover all or part of the salaries of apprentices currently employed, but applicant companies must be SMEs and SMMT members.

The UK automotive industry is built on decades of craftsmanship, engineering excellence and innovation delivered by a highly skilled workforce – and its long-term recovery and growth will depend on retaining and developing this skills base. That’s why it’s so important that we do everything possible to ensure that we don’t let today’s challenges hinder our long-term aspirations. Today’s apprentices are tomorrow’s leaders, and this scheme will help protect their jobs now so that they can help drive our future success. For more information, and to apply, please click here.

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