Risk to vehicle availability and choice as EV targets influence the market

The transition to electric vehicles (EVs) – including strategic adjustments by existing manufacturers and competition from new entrants – could result in fewer choices in vehicle brands and models as manufacturers reduce their exposure to the UK.

That’s according to the latest forecasts in Cox Automotive’s Insight Quarterly (IQ), which also warns that vehicle availability could become an issue, with original engine manufacturers (OEMs) choosing to focus on matching supply with actual ask.

Cox Automotive’s Insight Director, Philip Nothard, explains: “The evolving landscape is prompting many OEMs to reassess the agency sales model, often delaying full implementation as they seek greater financial transparency.

“With the shift from traditional ‘push’ to demand-driven ‘pull’ sales, consumers may experience reduced vehicle availability, reflecting OEMs’ focus on matching supply with actual demand.”

Cox Automotive’s predicts almost two million new car registrations next year (2025), which represents a slight increase of 3.6% compared to 2024.

However, volumes remain 11.6% below the average for the period 2001-2019 – an indication of the challenges that still await the sector.

Britain’s dependence on global manufacturers remains significant, with 90% of new car registrations made up of imports.

In 2023, this translated into a record 1.72 million units imported, an increase of 18.6% compared to 2022, a trend that is likely to continue in 2025 and beyond.

These import levels underline how global OEM decisions directly impact vehicle availability for UK consumers and fleet operators.

“While global car production remains high, a growing discrepancy between production figures and Britain’s ambitious ZEV targets is raising questions about OEMs’ commitment to meeting UK mandates, especially as pressure mounts to boost EV sales cars,” said Nothard.

“The industry faces complex tradeoffs as it reduces ICE production to meet ZEV targets, making 2025 and beyond a period of significant market transformation.”

Under the Zero Emission Vehicle (ZEV) Mandate.which came into force in January, ZEVs must make up 22% of an OEM’s new car registrations and 10% of new van sales this year or face fines of £15,000 for each vehicle sold outside the target.

These ratios will increase annually until 2030, after which they will reach 80% and 70% respectively. But the reality of the targets is not as clear as this, as there are several alternative ways in which manufacturers can meet compliance.

These are intended to mitigate risks associated with product investment cycles and uncertainty about sales volumes.

Ministers are having crucial conversations with manufacturers with factories in Britain this week, but it seems unlikely the targets will be watered down despite mounting pressure from industry.

Tipping point in 2027

Cox Automotive predicts a turning point in 2027 as the market continues to move away from combustion engines.

Registrations of diesel and mild hybrid electric vehicles (MHEV) are expected to fall from 6% in 2024 to just 3% in 2027, a decline of 56.8%.

It is expected that the number of petrol/MHEV registrations will decrease from 51% to 35%. Conversely, battery electric vehicle (BEV) registrations are expected to rise from 21% to 34%, a significant increase from 165.4%, with registrations of plug-in hybrid electric vehicles (PHEV) and hybrid electric vehicles (HEV ) will increase from 22% to 28%. %.

Nothard concludes: “By 2027 we expect to see a crucial shift in the UK automotive landscape as the industry moves permanently away from combustion engines.

“With shares of diesel and petrol vehicles set to fall sharply, and battery-electric vehicles expected to make up well over a third of new registrations, the market is clearly accelerating towards an electrified future.

“These changes underscore the need for adaptable strategies as both manufacturers and consumers embrace a new era in mobility.”