The UK’s new car market had a strong performance in July, marking the best month for registrations since the Covid-19 pandemic began. The increase in sales was largely driven by a surge in fleet purchases.

According to the Society of Motor Manufacturers and Traders (SMMT), the fleet market experienced a remarkable growth of 61.9% compared to July 2021. Sales to fleets made up 56% of the UK’s total car sales for the month, amounting to 143,921 units.

This figure represents a 28.3% year-on-year increase in new car sales. However, it is still lower than the 157,198 units sold in July 2019, prior to the pandemic.

There was also a significant rise in sales of battery-electric vehicles (BEVs), which increased by 87.9% compared to June 2022, reaching a total of 23,010 units. Despite this increase, the market share of BEVs in the overall sales remained consistent with the rest of the year, according to the SMMT.

A similar boost of 79.1% was seen in the sales of plug-in hybrids (PHEVs). These increases can be attributed to generous tax incentives for fleet users who choose to operate BEVs and PHEVs.

Currently, Benefit-in-Kind (BIK) tax rates for BEVs are set at 2%, while PHEVs with CO2 emissions rated at 1-50g/km are subject to tax rates ranging from 2% to 14%, depending on their electric range. In contrast, a mild-hybrid-petrol Ford Puma Ecoboost mHEV 125, with CO2 emissions of 122g/km, falls into the 22% BIK tax bracket.

Pure-petrol engines remained the most popular choice for consumers, with 58,150 units sold, despite experiencing a 5.3% decline in market share compared to the previous year. Mild-hybrid petrol engines followed closely behind with 23,590 sales.

The SMMT welcomed the news that 3,056 public electric vehicle (EV) chargers were installed between April and June, setting a quarterly record. However, it urged the government to accelerate charger installation in order to meet the minimum target of 300,000 chargers by 2030. The SMMT stressed the need to triple the installation rate to nearly 10,000 chargers per quarter.

Mike Hawes, the chief executive of the SMMT, emphasized the importance of government support to make EVs more affordable and practical for all drivers across the country. He urged the government to take action and ensure that buying, running, and charging an EV is accessible for everyone.