Why demand for diesel cars is surging ahead of electric vehicles despite all the discounts

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Louise Thomas

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Private demand for new diesel cars is growing faster than for pure battery electrics, preliminary figures show.

Registrations of new diesel cars for private buyers in September grew by around 17.2 per cent compared with the same month in 2023, up 1,369 units, according to the Society of Motor Manufacturers and Traders (SMMT).

That is compared with an approximately 3.7 per cent year-on-year rise for pure battery electrics – up 430 units – despite heavy discounting by manufacturers.

Final figures will be published at 9am on Friday.

The SMMT said car makers are on course to “spend at least £2bn on discounting electric vehicles (EVs)” this year in an effort to offset the “underlying paucity of demand”.

September was a record month in terms of overall battery electric new car registration volumes, at around 56,362 units.

The SMMT and senior UK leaders at major vehicle manufacturers such as Ford, Stellantis, JLR and Volkswagen Group have written to chancellor Rachel Reeves calling for urgent support to encourage more consumers to switch to electric motoring, ahead of her Budget on 30 October.

The signatories called for measures such as halving VAT on new EV purchases and reducing VAT on public charging from 20 per cent to 5 per cent to match the home charging rate.

They wrote: “We appreciate the severe constraints on the public purse, but deliver this support to consumers and the benefits are myriad: a thriving market, enhanced consumer choice and affordability, investment attractiveness, high-value job creation, cleaner air, quieter streets and economic growth.

“We know your government is committed to a vibrant and competitive UK automotive industry.

“With the right measures, the right consumer support, we can fix the foundations of this transition and with it deliver the biggest technology transition ever attempted, and the economic growth and environmental improvements that should be non-negotiable.”

The signatories added that the industry will “likely miss” targets set by the zero emission vehicle mandate, which requires at least 22 per cent of new cars and 10 per cent of new vans sold by each manufacturer in the UK this year to be zero emission, which in most cases means pure electric.

Manufacturers face being required to pay the government £15,000 per polluting vehicle sold above the limits, or purchase credits from rival companies.

The letter warned that “these are not consequence-free choices”, and it is “the consumer who pays” as costs are passed on.

The overall number of new cars registered last month rose by 1.1 per cent year on year to 275,089 units.

September is traditionally a bumper month for the industry due to the release of new number plates.

Growth was driven by purchases for fleets owned or leased by businesses or other organisations, which were up 3.8 per cent.

Private consumer demand fell by 1.7 per cent, while the smaller business sector saw volumes decrease by 8.3 per cent.

SMMT chief executive Mike Hawes said: “September’s record EV performance is good news, but look under the bonnet and there are serious concerns as the market is not growing quickly enough to meet mandated targets.

“Despite manufacturers spending billions on both product and market support – support that the industry cannot sustain indefinitely – market weakness is putting environmental ambitions at risk and jeopardising future investment.”

Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said: “Electric vehicle sales surged in September.

“Record discounts are driving the interest as brands and retailers do all they can to stimulate sales, showing once again just how sensitive the market is to financial incentives, and the importance of overcoming the current EV cost barrier.

“There’s still much to do to drive further levels of interest and sales – and discounts can only last so long.

“Other measures are needed to help buyers make the switch to electric cars which still carry a 30 per cent price premium over their ICE (internal combustion engine) counterparts.”