Editor's PickForexElectric car sales reach record high in UK despite supply chain disruption

January 5, 2023

Sales of electric vehicles have reached record levels in the UK, although supply chain disruption drove total sales of new cars to their lowest level in 30 years.

Just more than 1.6m new cars were sold in the UK last year, a 2% fall from 2021, and the lowest level since 1992, according to the annual sales snapshot from the Society of Motor Manufacturers and Traders (SMMT).

However, the UK car industry got a boost as car owners continued to switch away in greater numbers from petrol and diesel in favour of battery electric vehicles.

Sales of electric vehicles reached their largest-ever monthly market share in December, accounting for almost a third of all new cars sold. Throughout 2022, electric cars represented almost 17% of sales, surpassing sales of new diesel cars for the first time.

Tesla was the standout electric performer, and the US company’s Model Y was the top-selling electric vehicle and also climbed to third place on the UK’s Top 10 bestsellers list.

Fleets and business buyers were responsible for the lion’s share of electric car sales, representing two-thirds (66.7%) of all registrations.

Total sales of new cars began to pick up in the second half of the year, when there were five consecutive months of growth from August onwards.

December recorded an 18% increase in new car sales to approximately 128,000 registrations, the SMMT found, although this still was not enough to offset the falls seen during the first six months of 2022.

The disruption to global supply chains and continued shortages of crucial semiconductor chips, unleashed by the pandemic and exacerbated by Covid restrictions in China, continued to affect carmakers as they did in 2021.

As a result, overall UK car industry sales for the year remained below the previous year’s levels, while 700,000 fewer new cars were sold last year than in 2019.

Mike Hawes, the SMMT’s chief executive, said the reduced supply of chips – used in everything from windscreen wipers to entertainment systems – had built up long waiting lists at carmakers, as drivers sometimes waited more than 12 months to receive certain models.

“Manufacturers have really struggled to be able to make vehicles in sufficient quantities they need, primarily due to semiconductor shortages, but there are other parts chain shortages behind that as well,” Hawes said.

“High logistics costs, more pressure on raw materials, the complexities of global manufacturing have really been brought to bear heavily on the industry this past year.”

However, Hawes said these pressures are beginning to ease, and the SMMT is predicting 2023 to be a “year of recovery”.

The industry body is forecasting new car sales growth of 15% this year, as manufacturers work to bring down waiting lists, despite the expected economic downturn.

“We are conscious that with the UK going into recession, demand may decline to a certain extent, but there is a buffer there,” Hawes said.

Despite growing numbers of electric car sales, Hawes said “charging anxiety” remains the big concern for prospective buyers, stopping some drivers from making the switch.

British companies installed a record number of public electric car chargers last year, competing to get a foothold in the fast-growing and lucrative market. This took the total available to more than 37,000, according to Zap-Map, a data company.

Boris Johnson’s government forecast 300,000 publicly available chargers would be required by 2030, when the sale of new pure petrol or diesel cars will be banned.

To meet this target, 100 new chargers would have to be installed every day; however, the SMMT said the current rate is about 23 a day.

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