Tesla Model Y tops UK’s sales chart in June as registrations grow again

Tesla’s Model Y topped the UK new car sales chart in June in what was an 11th consecutive month of growth in vehicle registrations – driven in part by a 40 per cent rise in the number of electric vehicles hitting UK roads.

But despite headlines suggesting a mature demand for electric cars, industry bosses sounded the alarm about slow consumer adoption of greener models as incentivized fleets and companies drove increased sales of electric cars.

And there are also some very good reasons why Tesla’s Model Y took the number one spot in June…

Why is the Tesla Model Y at the top of the sales charts?

Some 5,539 Tesla SUVs were registered in the UK last month, as did the Ford Puma crossover with 5,453 leaving dealers in June.

However, this is because Tesla registrations traditionally rise at the end of each quarter, when a new shipment of vehicles arrives from Germany, where the Model Y is produced for the UK market.

So it’s no surprise that a Tesla rises to the top of the sales order at the end of the second quarter, as it did in June 2022 (it took second place behind the Vauxhall Corsa that month).

Looking at sales for the first six months of 2023 as a whole, Model Y is fourth overall with 19,551 registrations – some 3,214 behind the Puma, which was the most popular new car in the first half of this year.

The Model Y’s success has also been driven by significant price reductions from Tesla since early 2023, as the US manufacturer bids to attract more customers.

For example, the price of the Model Y Performance has been reduced by more than £9,000 since the beginning of January.

Tesla earlier this week announced record second quarter global car deliveries as it remained in a price war in the burgeoning electric car market.

Elon Musk’s company delivered 466,140 cars in the three months to the end of June, surpassing the forecast of 445,000 and more than the 422,875 in the first quarter.

Looking further into the top 10 most popular new cars in Britain so far in 2023, the Ford Fiesta ranks ninth with more than 15,000 sales.

The hugely popular Ford supermini will end production on Friday, with the Fiesta name being dropped to make way for a new small electric replacement.

EV registrations driven by fleet demand

In total, some 177,266 new cars entered UK roads last month, an increase of a quarter (25.8 per cent) on the June 2022 figures.

And more than one in six of these cars were battery electric vehicles.

A whopping 31,700 EVs were registered last month, representing a year-over-year growth of 39.4 percent and meaning EVs accounted for 17.9 percent of the market share in June.

But a deeper dive into the data shows that the majority of these registrations are not private buyers, but fleets and companies receive substantial tax benefits in kind (BiK) for company electric cars.

The Society of Motor Manufacturers and Traders – the trade organization that publishes registration data – has called on the government to take action to accelerate consumer readiness to switch to an electric car.

One of the recommendations is to reduce VAT on electricity sold at public EV chargers.

Mike Hawes, CEO of SMMT, said: “The new car market is growing back and going green as the appeal of EVs to more drivers becomes apparent. But to achieve our climate goals, we need to act even faster.

“Most electric vehicle owners enjoy the convenience and cost savings of charging at home, but those who don’t have a driveway or designated parking space pay four times as much in taxes for the same amount of energy.

“This is unfair and threatens to delay greater adoption, so reducing VAT on public EV charging will make EV ownership fairer and more attractive to even more people.”

Founder and CEO of EV website Electrifying.com, Ginny Buckley, said today’s registration numbers “are disproportionately skewed towards fleets and businesses, both of which are heavily incentivized” and despite the Tesla Model Y being the bestseller in June, most will have “gone directly to company car drivers.”

Buckley added: “A lack of financial incentives and confidence in our public charging infrastructure do little to help private buyers on their electric journey.

“We need to encourage more people to make the switch, and this can be done by equipping people with the right knowledge, improving our infrastructure and introducing incentives, particularly for used electric cars – this is a growth area and a key which will be critical for us to meet our net zero targets for the foreseeable future.

‘The government must also help car manufacturers by providing clarity about the ZEV mandate – and quickly. We desperately need this to bring clarity to the future of the British car industry.”

John Wilmot, CEO of car leasing comparison website LeaseLoco, says reducing VAT on public charges is “not the panacea” needed to boost demand for electric vehicles.

“The harsh reality is that EVs are simply too expensive for the average consumer, especially at a time when millions of people are struggling with the higher cost of living,” he said.

Elon Musk has recognized that affordability is a major barrier to EV adoption. Therefore, he forcefully lowered Tesla’s prices to revive the market.

Other manufacturers have followed suit, but they are unable to lower prices indefinitely.

And there’s no point spending billions on building charging infrastructure for the shift to greener driving if the vast majority of people can’t afford to buy an EV.

“Now is the time for the government to step in and reintroduce incentives to make switching affordable for the many, not the few.”

32 automakers on track to fail next year’s Zero Emission Vehicle mandate requirements

A total of 949,720 new cars were sold in the UK in the first six months of this year – this is 25.2 per cent less than half-yearly registrations in pre-pandemic 2019.

The nearly one million new models in 2023 will include 152,968 EVs, meaning zero-emission models will account for 16.1 percent of all new passenger cars entering the fleet.

With the government widely expected to impose a zero-emission vehicle (ZEV) mandate next year, the current share of electric cars could prove highly problematic for a number of manufacturers.

Ministers have outlined the requirement that 22 percent of car sales should be electric by 2024.

This is the first of annual rising EV registration targets through 2035, when 100 percent of new car sales must be zero-emission models.

If these targets are not met, makers are expected to face fines of £15,000 per vehicle.

Thinktank New AutoMotive estimates that 32 automakers eligible for inclusion in the ZEV mandate (those producing more than 2,500 vehicles per year) would collectively fall short of 44,000 credits to meet their regulatory requirements if the 2024 target was exceeded in recent years. would be in effect for 12 months.

This means they would have to borrow or buy out of their legal obligations, generating around £660 million in buyout income.

The SMMT says manufacturers offer a range of EV deals for private buyers, including flexible subscription models and attractive financing rates, but more needs to be done by other stakeholders to make purchases even more attractive.