New car registrations | January 2023
Six consecutive months of year-on-year sales growth is a reassuring sign for the industry and highlights that despite the current political and economic turbulence, the new car market is running counter cyclical to the wider economy.
“However, the dip in electric car sales reveals that December’s record performance – when one in three new cars sold in the UK was electric – was artificially inflated due to Tesla’s huge quarterly vehicle delivery and the impact of annual manufacturer emissions targets rather than reflecting genuine consumer appetite at that level.
“On our marketplace, demand for new electric vehicles (EVs) is at a three-year low. In the summer of last year, EVs accounted for nearly 30% of all new car enquiries being sent to retailers. By November, as electricity prices began to rocket, it had fallen to fewer than one in five, and today its fewer than one in 10 as energy prices have risen and some negative commentary have dampened demand.
“In the absence of government support, manufacturers will likely be forced to move on pricing to stimulate consumer demand, which we’re already beginning to see with the likes of Tesla announcing significant price reductions on key models. And it’s working. Following Tesla’s news, we saw an immediate 113% spike in Model 3 page views on our marketplace. As the race to EV dominance accelerates, I have no doubt we’ll see other brands follow suit, albeit probably with customer offers rather than list price cuts. While the industry won’t welcome the pricing and profitability challenge, if EVs are to achieve mass market success, they’ll need to bridge the current price gap of around 35% between similar EVs and their petrol or diesel equivalents. And hopefully, by building that scale, the economies generated can sustain the industry’s journey on the “Road to 2030”
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