Kristy Dorsey: Electric vehicles set to sway the balance as motor industry is 'on the precipice'

However, that staying power dropped significantly in the reality of inclement weather. Reaching your destination could easily require travelling for prolonged periods with the heating switched off in freezing temperatures, perhaps coupled with a dogged hunt through a darkened industrial estate for a functional charging point.

But as with all technology, things have improved in the intervening years. The standard 40 kWh battery on the 2022 Leaf now delivers a range of up to 149 miles in optimal conditions, and for those who can stump up for the Tesla Model S, that jumps to an exceedingly comfortable 360 miles.

Better range and a wider choice of models have combined with rising fuel prices to sustain EV sales in recent months, with one in five new cars in the UK either a pure electric or plug-in hybrid. It also reflects market realities as these will be the only types of cars allowed to be sold from new in the UK in a little more than seven years’ time.

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However, with 80 per cent of buyers yet to take the plunge, much more remains to be done to reach this milestone in the UK’s green agenda. Furthermore, there are definitive signs that momentum behind the EV bandwagon is stalling.

Data released yesterday by the Society of Motor Manufacturers and Traders (SMMT) show that new car sales inched higher in August for the first time in six months, driven largely by battery electric vehicles (BEVs).

Registrations for all types of vehicles rose by 1.2% last month on the same period a year earlier to reach nearly 69,000, with BEVs posting an 35.4% upturn in volumes. Electric vehicles now account for 14.5% of the UK’s new car market, up from 10.9% in August 2021.

EV sales have been the silver lining in otherwise gloomy conditions for the UK’s automobile industry, which has been battling against a variety of headwinds.

New registrations so far this year across all categories are more than third down at 35.3% compared to 2019 as the industry struggles with persistent semiconductor shortages, the cost-of-living squeeze and surging prices for energy and raw materials.

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August is traditionally a low-volume month for new car sales as many consumers hold out for the latest numberplate release in September. Mike Hawes, chief executive of the SMMT, said the “true barometer” of industry recovery will come with the next set of registration figures due to be released early next month.

“Spiralling energy costs and inflation on top of sustained supply chain challenges are piling even more pressure on the automotive industry’s post-pandemic recovery, and we urgently need the new Prime Minister to tackle these challenges and restore confidence and sustainable growth,” Mr Hawes said.

Car manufacturers were forced to scrap plans for millions of new vehicles during the past two years because of a shortage of semiconductors. While there are now some signs that constraints are easing, estimates suggest as many as 13 million vehicles were cut from production, creating long lead times on delivery dates for new vehicles and significantly higher prices across the used market.

Input prices are meanwhile on the increase, and these must eventually be passed on to consumers who are increasingly unwilling to commit to big-ticket purchases as they also face unprecedented utility bills.

The SMMT noted yesterday that uptake of new pure electric cars is slowing with year-to-date registrations up 48.8% compared to 101.9% at the end of March. Leading advertising business Auto Trader says its data is also beginning to show signs of waning appetite for EVs as buyers weigh up higher charging costs against running a traditionally-fuelled vehicle.

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According to the RAC, charging at home remains good value compared to traditional fuels despite recent falls in pump prices. There will still be an impact, however, with the cost of running a typical family-sized electric SUV set to rise by 84% to £33.80 with the new domestic energy price cap that is due to take effect on October 1.

The pain will be more acute for those who can’t charge at home as public charge point operators will have no choice but to increase prices to reflect rising wholesale costs. The FairCharge campaign, backed by the RAC and others, is calling for a cut on the rate of VAT levied on electricity from public charge points to 5% to mirror that charged for domestic electricity.

Along with clean tailpipe emissions, one of the biggest selling points of electric vehicles has been that they are likely to cost less over the course of ownership than petrol or diesel alternatives. This theorem is now set to be put to the test, with the upfront sticker price on the 10 cheapest new EVs in the UK running at anywhere between approximately £17,000 and £27,000, versus roughly £12,000 to £15,000 for petrol or diesel models.

With money for most people too tight to mention, these financial considerations will weigh heavily on the near-term future of the EV market and the wider automotive industry which Jim Holder, editorial director at What Car?, says is sitting “at the edge of a precipice”.

“It faces the short-term crisis of a potential recession eroding new car demand and undermining the buoyant used car market, plus the potentially longer-term impacts of rising energy and raw material costs, all at a time when it needs to be investing unprecedented amounts in new electric car technology,” he said.

The new Prime Minister’s in-tray is daunting, but if the government’s “green industrial revolution” is to succeed, she will need to find ways of supporting the industry. This must include significant investment in public charging infrastructure and incentives for drivers to accelerate the transition to zero emissions mobility by 2030.