2022 brought change in numerous ways. Not only did the door at No.10 see three Prime Ministers pass through, the country also witnessed a change in the Monarch and a cost of living crisis, which still ensues.
Every industry faced uncertainty throughout 2022, but the year wasn’t all doom and gloom for the auto sector. While general sales haven’t gained as much traction compared to pre-pandemic numbers, new EV sales saw a significant rise becoming the second most registered car on UK roads.
The sector as a whole has experienced a mix of technological advances, supply issues and market shifts. So what were the key reflections on how 2022 impacted the motor industry? Let’s take a look:
Electric car sales up
2022 was certainly the year for switching to electric. Pure electric vehicles, or BEVs, were the second most registered cars on UK roads, with a 40.1% increase from the previous year.
The market share for EVs grew too, now taking up 16.6% compared to 11.6% in 2021. While these figures have some climbing to do before they take over petrol registrations – it’s a welcome increase for the sector, who are gearing up to make the switch to electric by 2030.
Of course, topping the list of EV purchases was Tesla, with the Model Y and S featured in the first and second spots. However, brands such as Kia and Volkswagen also proved popular choices for new EV drivers.
As more models come into the mix, 2023 could see another rise in both market share and new registrations as consumers opt for electric over petrol or diesel.
Car production continues to grow steadily
The past few years have proved challenging for car producers the world over. Chip shortages, supply issues, worldwide pandemic, and war have seen a decline in vehicle production.
In August 2022, figures from the SMMT showed numbers were down 6% even after four months of growth. However, towards the end of the year, the car sector again saw an increase. November’s figures from the Society of Motor Manufacturers and Traders show a 5.7% increase. Plus, with six out of the last seven months in growth, this is encouraging news for the industry.
Of course, these levels are nowhere near pre-pandemic figures. But, despite the turbulent events of late, 2023 hopes to see further growth, particularly in the EV sector.
Government stops the UK Plug-in Car Grant for most vehicles
In June 2022, the government announced its discontinuation of the plug-in car grant (PiCG). This grant was available for drivers purchasing a new electric vehicle and helped with the cost of switching to electric.
The closure of the grant now means a shift in funding to other areas, such as EV infrastructure and assistance in making the commercial sector greener. So, if you’re looking to buy an electric van, taxi or motorbike, a grant is available for this (selected models only).
Some industry experts fear the axing of the grant for the average car buyer may impact how many people choose an EV. Electric vehicles are currently more expensive than conventional petrol or diesel models. So, there are fears without the grant, drivers will reconsider switching to electric.
As this change started in mid-2022, the potential impact on new EV registrations isn’t clear yet. However, as the sector appears to be growing significantly, the grant closure may not rock the boat as expected.
Car manufacturers making changes
Due to a number of uncertainties and rising costs throughout the sector, some car producers are making significant changes to production.
In October 2022, BMW announced some of its electric vehicles would now be manufactured in China rather than its Oxford base. The company have stated its UK operations will “still be at the heart of Mini production”. But its deal with the Great Wall Motor company in China will see some vehicles come from this location.
More recently, Jaguar Land Rover was said to be temporarily reducing output at its Halewood and Solihull factories. This action is believed to last until the spring as chip shortages affect new vehicle production. As a result, models such as the Land Rover Discovery Sport and Jaguar F-Pace could be affected.
Huge UK gigafactory saved from administration
Hoping to become a leader in battery technology, British manufacturing start-up Britishvolt has recently secured backing after falling into financial difficulty.
The planned £3.8bn factory based in the North East is proposed to bring up to 3,000 jobs to the area and put the UK on the map for battery supply.
The company, as yet, doesn’t have any core customers. But it is said brands such as Lotus and Aston Martin may be some of the first to develop batteries suitable for their models.
Changes to Vehicle Excise Duty
Many drivers pay road tax based on emissions or engine size (depending on the age of the vehicle). However, EV drivers have enjoyed an exemption due to zero emissions produced at the tailpipe. But in the Autumn Statement, the chancellor announced big changes to VED – all drivers will pay it after 2025.
The standard annual charge is set to start at £165 with a discount in the first year. Plus, it applies to all EVs registered after 2017. Additionally, a premium supplement will apply to vehicles purchased for over £40,000. So this could apply to many electric cars on sale.
Concern has been raised about this change, as paying no road tax is one of the many benefits of owning an EV. However, as it doesn’t come into effect for a few years, it’s unclear whether it will significantly impact EV sales from 2025.
What’s coming in 2023?
The car industry is working hard to bring drivers the best models and technology to make journeys comfortable and stylish. But, as the cost of living crisis and supply issues impact the sector, 2023 may still present challenges for production.
Fortunately, with a glimmer of growth in recent months, steady progression will present optimism throughout the sector as we enter the New Year.
