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January’s registration figures didn’t show an eye-catching swing for electric car demand in either direction, but the fact they haven’t moved much at all year on year could be an early warning sign (indeed, some industry voices are suggesting as much).
This time last year we saw strong EV demand as drivers wanted to move ahead of new taxes or charges coming in. Those charges are now here. More are due.
The UK’s transition to electric vehicles is entering its most demanding phase. The easy wins are behind us, the targets are looming, and the decisions taken this year will determine whether the UK accelerates confidently towards 2030 or risks stalling.
That is why the Transport Select Committee’s inquiry into EV adoption is so timely, and so important.
BVRLA members are at the forefront of this transition. Collectively, they operate around 750,000 electric vehicles across cars, vans and rental fleets, giving them a uniquely practical view of what is working, what is not, and where policy is inadvertently undermining progress. The message from across our membership is increasingly consistent: confidence in the market is fragile and faltering.
This is not because the ambition is wrong. The sector remains fully committed to decarbonisation and providing cleaner, green vehicles that meet motorists’ needs. Mixed messages and polarising policies are eroding confidence, weakening demand and fragmenting user groups.
Nowhere is this more evident than in the used EV market. Rampant electric vehicle depreciation is costing billions of pounds and damaging confidence. That collapse matters. Used values underpin the affordability of new vehicles and the business models of fleets, leasing and rental providers. If left unchecked, this volatility could result in almost 290,000 fewer new EV sales by 2027. ZEV mandate targets desperately need that number to go the other way.
Demand challenges are also acute in the rental market and across huge numbers of van users. Even in high-penetration countries such as Norway and Iceland, rental operators struggle to transition due to customer hesitancy. In the UK, electric van uptake continues to grow but lags far behind mandate expectations. This is despite some great wins secured by the Zero Emission Van Plan. Operators are still constrained by vehicle performance gaps, inaccessible public charging and the high cost of upgrading depot grid connections.
For drivers without home charging, the economics remain strained. Public charging is expensive and unevenly distributed, with high prices and the perception of unreliable units acting as deterrents to adoption. At the same time, chargepoint operators have seen standing charges rise by around 450% since 2021, adding further pressure to an already fragile ecosystem.
Individually, none of these challenges are insurmountable. Collectively, they point to a deeper issue: the lack of a coordinated, whole-system approach to the EV transition.
Taxation, regulation, incentives and infrastructure are being developed in silos. The proposed introduction of electric Vehicle Excise Duty (eVED) is a case in point. It lacks careful design and proper consultation, and risks destabilising both new and used EV markets at precisely the wrong moment. Similarly, well-intentioned incentives such as the Electric Car Grant are constrained in ways that limit their impact on mass-market demand.
As we enter the second half of the decade, the pressure is intensifying on all sides: to deliver carbon reductions, to safeguard business viability and to unlock growth. This is the moment for government to step back and take a holistic stocktake of where the transition truly stands and what interventions will deliver the greatest confidence boost.
In our submission to the Select Committee, we have set out a small number of targeted recommendations that could genuinely supercharge the EV transition:
- Reconsider the introduction of eVED and widen the scope of consultation to avoid unintended disruption to new and used EV markets.
- Remove restrictions on the Electric Car Grant and extend support to used EV purchases to stimulate broader demand.
- Take a holistic approach to reviewing the ZEV Mandate, explicitly addressing weak demand in rental, used and van markets.
- Protect and enhance usership incentives, including retaining low benefit-in-kind rates and exploring targeted support for used EVs.
- Develop a cross-departmental EV strategy, aligning the policies of the DfT, Treasury, DBT and DESNZ across the full lifecycle of vehicles.
The UK can still lead the global transition to zero-emission mobility. But leadership now depends less on setting ambitious targets and more on creating the stable, joined-up policy environment that allows businesses and consumers to move forward with confidence.
This inquiry is an opportunity to reset, realign and rebuild trust in the transition. We urge government to seize it.
