Electric car output drops by a quarter as demand tails off

The production of electric cars including hybrids fell by 25.9 per cent last month as demand waned, new figures show.
This led to a decline in their share of overall car output to 29.6 per cent, according to the Society of Motor Manufacturers and Traders, the car industry body.
However, the trend is expected to be reversed in the longer term as new battery-powered models become available.
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Overall car production in the UK dropped by 8 per cent in August, the SMMT found, as factories also wound down their production of key models.
Under the zero-emission vehicle mandate, 22 per cent of car sales this year must be electric vehicles. This rises to 28 per cent next year and increases incrementally until 80 per cent of all sales must be electric by 2030. Labour has pledged to ban the sale of petrol and diesel cars by the end of the decade, which means that the remaining 20 per cent are likely to be hybrid vehicles.
Carmakers that fail to meet the target face fines of £15,000 per diesel or petrol vehicle they sell, although they can avoid the fines by buying credits from fully electric car makers, such as Tesla, or those that have exceeded the target.
Manufacturers and dealers have dropped the prices of electric vehicles this summer to clear showrooms for the autumn and much of the electric car demand remains with fleets and businesses, where company car tax incentives are in place, compared with cash-strapped private buyers for whom there are no subsidies.
The decline in electric production numbers mirrors a slump in the European market. Figures from the European Automobile Manufacturers’ Association, the trade body, show that sales of battery electric cars collapsed by 43.9 per cent to 92,627 in August and accounted for only a 14.4 per cent share of the European Union car market, down from 21 per cent last year.
Shrinking electric vehicle sales partly reflect diverging policies on green incentives across the EU. In addition, regulators have imposed hefty tariffs to try to keep out cheap Chinese vehicles, potentially adding to purchase prices.
It comes as Stellantis, the owner of Vauxhall, has said it will launch a Chinese-made electric car that it plans to sell in Britain for just under £16,000, as western brands race to launch their own models and to compete with Chinese manufacturers.
August typically records the smallest volume of manufacturing in any month, with many carmakers taking advantage of the summer holiday season to upgrade their plants, including to accommodate the production of electric vehicles. The SMMT said production for the home market had dropped by almost 20 per cent as exports fell by 5.9 per cent.
UK car production is down by 8.5 per cent at 522,823 units in the year to date, although output for the domestic market is up 12.3 per cent despite August’s domestic decline.
The EU remained Britain’s largest car market, accounting for almost 50 per cent of exports, with America and China in second and third positions, respectively, at 17 per cent and 6.5 per cent.
Mike Hawes, the SMMT’s chief executive, said that the traditional summer shutdowns and factories preparing to switch to new models meant August was always going to be a quieter month, but he added that the sector remained optimistic about a return to growth after record levels of investment were announced by manufacturers last year.
“Realising those investments and securing more depends on the UK industry maintaining its competitiveness so we look forward both to the chancellor’s autumn budget and the government’s proposed industrial strategy as critical opportunities to demonstrate that it backs auto.”