Corporate demand for zero-emission vehicles has fired up new car sales, with the market recording its best February in 20 years.

Demand from corporations for zero-emission vehicles has boosted new car sales, resulting in the best February performance in two decades. According to industry data, 84,800 new cars were registered in the UK last month, marking a 14 percent year-on-year increase and the highest February figure since 2004. Traditionally, February sees lower sales due to the upcoming annual number plate change in March.

Corporate buyers, rather than private consumers, have been the primary drivers of this growth in the early months of 2024. Fleet and business purchases made up 66.3 percent of all registered vehicles last month, compared to an average of 56.9 percent in 2023. This trend is attributed to corporate sustainability goals and favourable tax incentives for zero-emission vehicles, leading to a resurgence in their sales after a period of decline following regulatory changes.

Battery electric vehicles accounted for 17.7 percent of the market in February, up from an average of 16.5 percent in 2023. Year-on-year, electric car sales have increased by nearly 22 percent, reaching 14,990 units. However, the Society of Motor Manufacturers and Traders (SMMT) believes that more incentives are needed to encourage private consumers to adopt electric vehicles, emphasising the importance of government policy in reducing carbon emissions.

Mike Hawes, CEO of the SMMT, has called for policy changes in the upcoming budget to make electric vehicles more attractive to private buyers. Specifically, the SMMT proposes reversing proposed excise duty changes, adjusting VAT rates for public recharging points and reducing VAT on new electric car purchases. These measures aim to facilitate a faster and fairer transition to a greener automotive market.

Despite challenges, key players in the electric vehicle market, such as Tesla and MG, have experienced significant growth in sales. Tesla’s sales have increased by 66 percent, while MG has seen a 20 percent rise in deliveries. Chinese electric brand BYD is also gaining traction in the UK market, outselling competitors like Polestar.