The UK’s automotive industry is celebrating a landmark September, as a government subsidy program, reinstated after intense lobbying, successfully drove electric car sales to a record high. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), noted that “electrified vehicles are powering market growth,” validating the industry’s massive investment in zero-emission technology and providing a much-needed boost after a slow summer.
Struggling to meet the government’s zero-emission vehicle (ZEV) mandate targets, carmakers had argued strongly for the return of consumer incentives. Their efforts paid off in July, and the September results reflect the policy’s impact. Sales of pure battery EVs increased by nearly a third, while plug-in hybrids, which offer a profitable middle ground for manufacturers, soared by 56%. This surge helped lift the overall car market by 14% compared to the previous year.
The ZEV mandate remains a central challenge, with the industry needing to achieve a 28% market share for EVs this year. The current figure of 22.1% shows a significant gap, though the government has introduced “flexibilities” to help manufacturers comply. These concessions, while welcomed by the industry, have been criticized by environmental groups for potentially undermining the policy’s climate goals. A thinktank has even estimated the “true” target, accounting for these flexibilities, is below 22%.
The subsidy has been particularly beneficial for established European and Japanese brands like Citroën, Renault, and Vauxhall. The grant’s structure, including a £37,000 price cap and rules on manufacturing emissions, effectively blocks many newer and highly competitive Chinese brands from benefiting. This has provided a strategic advantage to legacy automakers as they navigate the transition and intense market competition.
While the industry celebrates this success, challenges persist. Overall sales volumes are still well below pre-pandemic levels, reflecting broader economic pressures on consumers. Furthermore, the very incentive driving this growth is finite, with policy analysts suggesting the grant for 400,000 buyers might be exhausted sooner than expected, raising questions about the sustainability of this sales boom without continued government support.