Electric cars drive June UK sales as SMMT calls for VAT cut on charging

UK new car sales surged by 25.8% year-on-year in June, driven by solid demand for electric vehicles (EV) from firms and fleet buyers, according to industry figures released on Wednesday.

New car sales rose to 177,266 units last month, the 11th month of consecutive growth, although volumes were still below 2019 pre-pandemic levels, the Society of Motor Manufacturers and Traders (SMMT) said.

The body also called for a cut in value added tax on public charging for battery electric vehicles (BEV) as registrations grew 39.4% in the same period.

Drivers who charge from home electricity supply only pay 5% VAT to power up their EV, compared with 20% for those who are reliant on the public network, according to SMMT.

"This is unfair and risks delaying greater uptake, so cutting VAT on public EV charging will help make owning an EV fairer and attractive to more people," CEO Mike Hawes said in a statement.

"Most electric vehicle owners enjoy the convenience and cost saving of charging at home but those that do not have a driveway or designated parking space must pay four times as much in tax for the same amount of energy."

Almost one million new cars were registered in the first half of the year, with total registrations up 18.4%. BEV uptake hit a record 152,968 deliveries so far this year, the SMMT added.

June deliveries of petrol cars increased 13.5% while diesel registrations were down 22.3%.

Reporting by Frank Prenesti for Sharecast.com