Ian Plummer, commercial director at Auto Trader, said:
“The volume of new car enquires on our marketplace remains comfortably above pre-pandemic levels because for the vast majority, driving is not discretionary even in this climate of soaring inflation. Despite the slight uplift, the SMMT’s sales figures highlight just how much the industry’s ongoing supply challenges remain the key factor holding back the full potential of the market. But energy price rises are beginning to bite ahead of October’s surge in the energy price cap, and whilst sales growth continues, our data is beginning to show early signs of a waning of appetite for electric vehicles as buyers weigh up higher charging costs against running a traditionally fuelled vehicle.
“Despite the looming rise in energy bills, electric vehicles are still much cheaper to run than petrol or diesel cars, with the average driver saving almost £100 per 1000 miles. That will still underpin demand for EVs in the longer term, despite the higher up-front costs, but there could well be some short-term impact on EV demand as the financial benefits of running EVs compared to petrol or diesel are narrowed.
“The new Prime Minister needs to think imaginatively about ways to encourage EV adoption ahead of the 2030 ban on new diesel and petrol sales. That should include measures like bolstering the UK’s charging infrastructure, which is far too focused on the South-East. Cutting the 20% VAT rate on public charging points would be welcome, as would extending the Workplace Charging Scheme for those unable to charge up at home. Even non-financial benefits like allowing EVs to drive in bus lanes could encourage switchers. We cannot lose sight of the bigger prize.”