June saw plugin electric vehicles take 21.6% market share in the UK, up from 17.2% YoY. This despite a temporary availability shortfall, stemming from pauses at Tesla Shanghai. Overall auto volumes were at 140,958 units, the weakest June since 1996. The Tesla Model Y was the best selling plugin in June, and the 2nd best selling vehicle of any powertrain.
June’s overall plugin result of 21.6% comprised 16.1% battery electrics (BEVs), and 5.5% plugin hybrids (PHEVs). This compares to respective shares of 10.7% and 6.5% YoY.
As I’ve mentioned in this month’s other reports, Tesla’s recent temporary Shanghai shutdowns put a notable dent in the company’s European delivery volumes in June, relative to its recent trends. Despite the Model Y’s decent placing, Tesla’s June UK volume was actually just 43% of March’s volume, a shortfall of around 7,000 units.
Without this temporary Tesla down-blip, June’s UK results would have seen around 20% BEV share and around 25% plugins. And Model Y would have easily taken the top spot (it was only 820 units short, even with the headwinds). Things should be back on trend by September.
Plugless hybrids (both traditional, and mild), having grown greatly in 2020 and H1 2021, have been pretty flat over the past 12 months, oscillating around 28% share (+/- 3%). Right now they are at 28.7%, from 28.3% YoY.
These are obviously less polluting (roughly 15% to 25%) than combustion-only powertrains. But as the UK now moves quickly towards plugins and eventually full BEVs, plugless hybrids will be looked back on as a temporary transition technology, innovative in 1997, but less so in 2022, and are likely now near their peak in this market.
Combined combustion-only share dropped by 5% YoY, from 54.5% to 49.7%. Diesel passenger vehicle new sales in the UK are on trend to dwindle to under 2% in a couple of years from now.
Leading BEV Brands
Despite Tesla having a relatively off month (and quarter), it still clearly led the UK brand rankings, thanks to strong volumes of the Model Y in June, compared to other BEVs. Tesla took 24.8% BEV share (down from 33.6% in March).
Month to month BEV rankings can be erratic depending on temporary allocation decisions, and Tesla’s international shipping logistics always give it an outsized end-of-quarter. So let’s step back to the broader 3-month view:
Relative to Q1 2022, brand rankings one and two were unchanged in the most recent quarter; Tesla and Kia. This despite Tesla’s Shanghai pauses halving its quarterly UK BEV share, from 24.8% to 11.5%.
A few brands had decent climbs in Q2, over Q1:
Hyundai up 2 spots from 5th to 3rd
BMW up 2 spots from 6th to 4th
Vauxhall up 3 spots from 9th to 6th
Citroen up 9 spots from 21st to 12th
Most others stayed roughly stable, but a few brands fell down the rankings:
Volkswagen dropped 2 spots from 3rd to 5th
Mercedes dropped 5 spots from 4th to 9th
Nissan dropped 3 spots from 11th to 14th
Ford dropped 5 spots from 14th to 19th
With new and potentially very popular BEV models continuously coming on to the market (e.g., Renault Megane, MG4), there’s all to play for, and the ranks will no doubt be shaken up again over the coming months.
In terms of group performance, the second quarter was a very close race between the 3 leading non-Tesla groups: Stellantis climbed impressively from 4th to 1st, switching places with Tesla. Hyundai Motor Group dropped from 2nd to 3rd, switching places with VW Group.
In comparison to the first quarter of the year, BMW Group climbed two spots to 5th (from 7th), knocking SAIC out of the top 5 (for now). Expect Tesla to be back to #1 (and close to its previous ~25% share) by the end of Q3 2022. The race between the next 3 groups — now so closely competing — will be interesting to watch.
Outlook
With Tesla normally supplying up to one third of the UK’s BEVs in an average quarter, its halving of deliveries in the second quarter has of course temporarily dampened the country’s headline progress. Unless there are other near-term BEV-specific headwinds, things should be back on trend in Q3, and especially in September. Demand for BEVs still far outstrips supply and most waiting lists are 12 months long.
Other things being equal, I’d expect BEV share of 23–25% in September, plus another 5% of PHEV share, so almost 30% plugins combined. In December, on recent trends, plugins could reach around 40%, with perhaps 33% BEVs. Recall that December 2021 saw 25.5% BEVs (and 7.7% PHEVs).
However, other things are rarely equal. There are currently twin pressures in the UK of dramatic fuel price inflation (making BEVs potentially more attractive), and a general inflation crisis plus looming recession risk (which might make BEV’s premium purchase price more of a stretch, even for folks who have been eagerly waiting for 12 months).
Which of these forces will exert more influence is hard to say, so take my above trend forecast with a pinch of salt. I guess that — even if auto sales plummet due to recession — BEVs will still do relatively well, i.e. in terms of share, if not in absolute volumes.
What are your thoughts on the evolution of the UK’s auto market? Please join in the discussion in the comments section below.
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