Vertu boss hits out at Government ‘messaging’ as EV demand wanes

The boss of car dealership Vertu Motors has said the Government’s “confusing messaging” on net zero targets is partly to blame for cooling demand for electric vehicles.

Robert Forrester, chief executive of Vertu, said retail demand was “muted” following Prime Minister Rishi Sunak’s move to push back the ban on the sale of new petrol and diesel cars in the UK from 2030 to 2035, as well as cost-of-living pressures.

Mr Forrester said the Government has caused confusion by announcing soon after delaying the ban that it will still impose stretching targets for car manufacturers to achieve specific zero emissions vehicle (ZEV) sales targets.

More than a fifth (22%) of new cars sold by manufacturers in the UK next year must be zero emission, under the new rules, rising to 80% in 2030.

Mr Forrester said manufacturers are resorting to discounts and offers to try to boost flagging demand.

He said: “Increased supply of new electric vehicles from manufacturers is evident whilst retail demand (as opposed to fleet) remains muted.

“The Government’s confusing messaging may further contribute to this.

“Manufacturers are therefore seeking to stimulate retail demand for these vehicles through the offer of discounted prices and supported finance rates.

“These market dynamics combined with the ZEV mandate have the potential to disrupt the recovery of the new car market in the next few years.”

Recent industry figures from the Society of Motor Manufacturers and Traders (SMMT) showed retail sales of battery EVs fell 8.5% in the year to August 31.

But fleet sales have been boosted – up 64.8% in the year to August – thanks to companies incentivising staff to buy them through salary sacrifice schemes.

He added that the falling retail demand was also being driven by higher electricity costs increasing running costs, the removal of the plug-in car grant scheme on June 14 and “inadequate UK public charging infrastructure”, as well as rising insurance costs.

The comments came as Vertu reported pre-tax profits rising to £30.2 million in the six months to August 31 from £26.9 million a year ago on record revenues, up 21% at £2.4 billion.

Its results were boosted by its deal to buy Helston – its largest single acquisition, which completed at the end of last year.

Vertu said trading in September – the licence plate change month – was strong, but it flagged caution over the consumer outlook.

“Future consumer confidence levels will be key in determining future retail vehicle demand and the board remain cautious in this regard,” the group said.