Electric van incentives needed as outlook for registrations cut

Fleet demand for electric vans demand has risen by 19.8% year-on-year, with 15,658 units registered since January, according to newly published sales figures.

However, following a glut of new zero-emission van registrations in September, uptake was slower in October, down by a fifth (20.2%) to 1,362 units.

The Society of Motor Manufacturers and Traders (SMMT) says the sales data was skewed, because of a large fleet order in the same month last year.

Fully electric vans represent one in 20 (5.5%) new light commercial vehicles (LCVs) registered so far this year.

The SMMT says that uptake rates will need to accelerate as the Zero Emission Vehicle (ZEV) Mandate comes into effect in less than two months.

The ZEV mandate requires 10% of vans sold by manufacturers to be electric in 2024. Targets for manufacturers will increase each year, requiring 70% of new vans sold in Great Britain to be zero emission by 2030, increasing to 100% by 2035.  

The Autumn Statement, due later this month, is a key opportunity to send a message that now is a good time to make the switch, by committing to retain existing incentives and beneficial tax frameworks for battery electric vehicle (BEV) buyers, says the SMMT.

Looking further ahead, the SMMT also wants the Government to address major barriers to mass uptake, particularly by ramping up the rollout of public charge points which meet the specific needs of vans of all types and sizes.

Furthermore, by providing prompt legislative approval for driving licence derogations for LCVs weighing more than 4.25 tonnes, it says it will be easier for fleets to invest in the largest BEV vans, accelerating decarbonisation and improving air quality in every region of the UK.

SMMT chief executive, Mike Hawes, said: “As the crucial pre-Christmas delivery period commences, there is a clear appetite for fleets to be fitted out with the latest vans – and it is of critical importance that those vans are the latest, cleanest zero emission models. 

“With van makers committed to decarbonisation, the upcoming Autumn Statement is the moment for Government to send the right signal to operators ahead of the introduction of the Zero Emission Vehicle Mandate.

“Measures that address van-specific infrastructure challenges and enable more operators across the UK to make the switch are essential as we move towards a pivotal stage of the transition.”

LCV registrations increased by 17.7% in October

Overall new light commercial vehicle (LCV) registrations increased by 17.7% in October, with 26,342 vans, pickups and 4x4s joining Britain’s fleets.

The growth is some 3.8% above pre-pandemic 2019 levels and rounds off 10 consecutive months of rising demand this year, totalling 284,321 units.

It is the highest volume for two years as the easing of supply chain disruptions means that more operators can more readily renew their fleets, says the SMMT.

New van buyers continue to opt for payload and fuel efficiencies, with large vans – weighing greater than 2.5 tonnes to 3.5 tonnes – up 5.3% to 18,176 units last month, representing 69% of the market.

Demand for medium-sized vans drove growth, however, with deliveries more than doubling, up 106.1% to 3,801 units.

There was also a jump in demand for 4x4s and pickups, up 61.4% and 41.1% respectively, while registrations of the smallest vans continue to fall, 20.4% below last year at 438 units.

Outlook for 2023 registrations

With the van market enjoying 10 consecutive months of growth, the outlook for the year has been revised upwards to 332,000 units, a 1.4% rise on July’s outlook.

However, anticipated BEV registrations have been cut on the previous outlook to 21,000 units – still 26.8% above 2023 – a 6.3% market share.

SMMT had previously trimmed its outlook in July from 7.4% to a 7.1% market share.

Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK, says it is encouraging to see the resiliency of the LCV market with continued growth, indicating the easing of supply chain disruptions.

However, she added: "It is disappointing to see that the potential of the electric market remains untapped with anticipated BEV registrations having been cut by 9% on the previous outlook to 21,000 units. 

"The upcoming Autumn Statement provides a real opportunity for the Government to address electric van-specific infrastructure such as charging points, particularly with the Zero Emission Vehicle Mandate coming into effect in less than two months and incentives to encourage consumers to make the switch.

"Van operators do not buy with environmental sentiments as their first priority, but for business viability and product competitive pricing.

"It is imperative that the Government tackles these barriers to stimulate growth in the electric van market.”

Looking further ahead, 2024 is expected to see 334,000 new van registrations, with 34,000 BEVs exceeding 10% of the overall market.