One in four new cars is an EV, but electric car grant chaos is holding buyers back

One in four new cars registered in August were EVs in a month where the market shrank slightly compared with the previous year. Experts blame the declining sales overall on tough economic conditions and delayed purchases due to the slow and chaotic implementation of the Electric Car Grant.

According to the UK automotive industry trade body, the Society of Motor Manufacturers and Traders, just shy of 83,000 new cars were registered throughout August. That’s a two per cent dip compared with the same period in 2024.

Of this number, around 22,000 (26.5 per cent) were fully electric, which is around 15 per cent more than last year. Market share for EVs is up roughly four per cent from 22.6 per cent in August 2024 and six per cent from 20.1 per cent in 2023. However, when you consider the multitude of new affordable electric vehicles that have gone on sale since then, the switch to zero emissions hasn’t been quite as rapid as one would hope.

Adding insult to injury, the UK’s EV market share currently only sits at 21.9 per cent year-to-date which sits way behind the 28 per cent target set by the government’s Zero Emissions Vehicle (ZEV) mandate; this requires manufacturers ensure a certain proportion of their sales is fully-electric, otherwise they face hefty fines of up to £12,000 per car – even after the recent amendments to the scheme.

Managing director of sales at Close Brothers Motor Finance, John Cassidy, described how the latest figures “show a consumer base [that’s] running low on gas. The consecutive year-on-year fall is a testament to the difficult economic climate stopping motorists short from making purchases.”

Hopes that the ECG will deliver

Labour, as well as the entire car industry, are now pinning their hopes on the aforementioned Electric Car Grant (ECG), which provides a discount of up to £3,750 (or £1,500 in most cases) off the price of a new EV costing under £37,000.

With the discount having been announced in July and the first cars being granted eligibility in August, it’s unlikely that we’ll see the true impact of the grant for another couple of months. Insight director at analytics and solutions firm, Cox Automotive, Philip Nothard, explained that while August is typically a low-volume time for sales, “the delayed and staggered release of ECG eligibility is [in turn] delaying purchases.”

This mindset is echoed by Jon Lawes, managing director of Novuna Vehicle Solutions who said: “the mishandled Electric Car Grant is creating more confusion than confidence among motorists. With only two models qualifying for the full £3,750 discount and muddying last-minute rule changes, the botched scheme rollout risks stalling EV sales when affordability and choice matter most.”

With market supply now outpacing demand, Nothard says there is the potential for what he describes as “tactical activity and heavy discounting, particularly as consumer preferences continue to shift toward hybrid models. The year-to-date market is up two per cent to 1.265 million units, though [it’s] still 16.7 per cent below pre-pandemic levels, underscoring the need for careful management of supply and pricing to sustain recovery and meet zero-emission vehicle targets.”

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