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Gloucestershire Business News

SPECIAL REPORT: Car and van sales wobble as Tesla takes a direct hit

With new car and van sales seen as a vital element for keeping the economic ticking over, the industry's governing body is calling for a (sustainable) bump start from Westminster.

The latest data from Society of Motor Manufacturers and Traders (SMMT) shows activity in new car sales fell by 10.4% in April, while in news that may come as no surprise to van traders in Gloucestershire, commercial vehicles took an even bigger dent, to the tune of just under 15%.

With 120,331 car sales registered, plug-in hybrids (up 34.1%) and fully electric cars (rising 8.1%) held the fort, though even that the market share, at 20.4% remains a cause for concern: in line with the Zero Emission Vehicle Mandate requirement the UK has signed up to, EV sales are now revised down for a 23.5% share of the market in 2025, while the quotas we are supposed to meet insist on that slice of the pie being 28% this year and 33% in 2026.

Against this underperformance, the SMMT is increasing the volume in its calls for consumer incentives to boost demand for purely electric cars. The SMMT says we need:

● A halving of VAT on new EV purchases.

● Scrapping, or amending, of the VED Expensive Car Supplement.

● Equalising VAT paid on public charging to that levied at home.

According to Mike Hawes, the SMMT's chief executive, such measures would all help boost the market and send a strong signal to any hesitant buyers that now is the time to go electric.

Mr Hawes said: "April's performance is disappointing but expected after March's surge. Another month of growth for electric vehicle registrations is good news, however, even if demand remains well below ambition. Recent government adjustments to flexibilities and compliance within the ZEV Mandate are welcome and an important first step in relieving some of the pressure on the market and manufacturers."

But he added: "However, EV uptake is still being heavily and unsustainably subsidised by the industry which is why a compelling package of measures from government is essential if consumers are going to make the switch."

Altogether, the UK's new car market fall was the sixth in the last seven months, reflecting "a fragile economic backdrop and weakened consumer confidence", with 13,943 fewer cars registered in the month compared with the year before and 25.3% behind pre-pandemic April 2019.

In what is traditionally a quieter month following the March plate change, volumes were also impacted by the late timing of Easter, the SMMT said, which resulted in fewer working days.

In addition, the implementation of VED changes affecting all new cars, including the Expensive Car Supplement which became applicable to many new EVs from April 1, pushed transactions into March as shrewd buyers clinched a deal just ahead of the tax increases. Under the terms of this revision, an extra £425 is now payable each year for the second to sixth years on all models which are sold from £40,000 upwards.

Elsewhere in the car sales data, registrations fell across all sales types, with private, fleet and business demand dropping 7.9%, 11.9% and 10.9% respectively. In terms of powertrain performance, demand for hybrid electric vehicles (HEVs) fell by 2.9%, while petrol and diesel registrations were down 22.0% and 26.2% respectively. Conversely, registrations of cars with a plug rose: plug-in hybrids (PHEV) climbed 34.1% and pure battery electric vehicles (BEV) increasing 8.1% to 24,558 units, taking more than a fifth (20.4%) of the market.

The SMMT added: "There is now a huge range of BEVs on the market, with more than 130 models available - including an increasing number at lower price points - the result of massive investment by manufacturers to offer electric options for all consumers across all segments."

It said that these models are now the second most popular powertrain after petrol, but still sell below the 28% threshold required under market regulations: "While government's recently proposed amendments to the Zero Emission Vehicle Mandate requirements are welcome - recognising the intense pressure on the sector - the targets remain incredibly challenging and more must be done to stimulate demand."

Looking to the end of December, the SMMT says new car registrations are forecast to reach 1.964 million units but it is keeping its 2026 expectations below the two million mark for what would be the seventh successive year.

One autobrand is notable in the best sellers' list for its absence this month: with just 512 sales registered, US carmaker Tesla experienced a cliff-face drop in dealership interest, signifying a 62% shrinkage. In March, the maker sold more than 1,500 cars, though beyond a pronounced backlash of negative reaction to owner Elon Musk's close association with US president Donald Trump, the period has also coincided with an update to the Model Y which, some believe, will see a rise in pent-up order delivery in May's figures, when they are known.

Back in March and enjoying sales nearing 4,000, Tesla enjoyed third spot in the UK bestsellers list, with the Model 3 and Model Y being the second and third sellers respecitvely, eclipsed only by BMW's MINI Cooper.

Meanwhile, light commercial vehicle (LCV) deliveries fell by 14.9% in April, the fifth consecutive month of decline. Demand for new vans of all sizes softened, the SMMT said, while 4x4s and pick-ups enjoyed growth, while April's tax change for doublecabs "risks further decline".

New electric van uptake surged by a shocking 77.5% - but with the Zero Emissions Vehicle Manadate for LCVs this year being 16%, the figure still represents just half the target.

Overall, the SMMT says that manufacturers are ploughing on with major investment in the greenest van model choices, but infrastructure planning overhaul is urgently needed to speed up decarbonisation.

Some 20,332 new vans, 4x4s and pick-ups joined UK roads in April, making the month the worst since 2020, again in part due to the timing of Easter, while the period is also traditionally a low volume month and, therefore, subject to fluctuations.

The SMMT said: "More concerningly, the decline marks the fifth consecutive month of falling demand as weak business confidence holds back investment in the very latest models.

April's decline was led by 22.9% fewer registrations of the largest new vans, down to 12,113 units, albeit still representing almost six in 10 (59.6%) new LCVs.

"Deliveries of medium and small new vans also fell, by 5.8% and 5.5% to 4,344 and 571 units respectively. The contraction was softened by growth in new 4x4s, up 19.2% to 564 units while, more substantially, registrations of pickups rose for the second consecutive month, by 10.2% to 2,740 units - likely reflecting the fulfilment of orders placed before the introduction of new fiscal measures to treat double-cabs as cars for benefit in kind and capital allowance purposes."

● For Punchline-Gloucester.com's full report on the impact of the autumn statement's tax changes for doublecab drivers, issued last autumn with expert perspective from Hazlewoods, see our report here.

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