The transition to electric vehicles (EVs) – including strategic adjustments by incumbent manufacturers and competition from new entrants – could lead to fewer choices in vehicle makes and models if manufacturers reduce their exposure to the UK .

That’s according to the latest projections from Cox Automotive’s Insight Quarterly (IQ) report, which also warns that vehicle availability could become an issue as original engine manufacturers (OEMs) choose to focus on alignment of supply with real demand.

Philip Nothard, Cox Automotive’s chief analytics officer, explained: “The changing landscape is prompting many OEMs to re-evaluate the agency sales model, often delaying its full implementation as they seek greater financial transparency.

“With the shift from traditional ‘push’ sales to demand-driven ‘pull’ sales, consumers may see reduced vehicle availability, reflecting OEMs’ focus on aligning supply with actual demand .

Cox Automotive forecasts almost two million new car registrations next year (2025), a slight increase of 3.6% compared to 2024.

However, volumes remain 11.6% below the 2001 to 2019 average – an indication of the sector’s challenges ahead.

The UK’s dependence on global manufacturers remains significant, with imports accounting for 90% of new car registrations.

In 2023, this translated into a record 1.72 million units imported, up 18.6% from 2022, a trend expected to continue through 2025 and beyond.

These import levels highlight the extent to which global decisions by OEMs directly influence vehicle availability for UK consumers and fleet operators.

“While global vehicle production remains high, a growing mismatch between production rates and the UK’s ambitious ZEV targets raises questions about OEMs’ commitment to meeting UK mandates, particularly with the growing pressure to increase sales of electric vehicles,” Nothard suggested.

“The industry faces complex trade-offs as it reduces ICE production to meet ZEV targets, making 2025 and beyond a period of significant market transformation. »

Under the Zero Emission Vehicle (ZEV) Mandatewhich became law in January, ZEVs must this year represent 22% of an OEM’s new car registrations and 10% of its new van sales, or face fines of £15,000 for each vehicle sold outside of the objective.

These proportions will increase each year until 2030, when they will be 80% and 70% respectively. But the reality of the goals is not as clear, as there are several alternative ways for manufacturers to comply.

These aim to mitigate risks associated with product investment cycles and uncertainty regarding sales volumes.

Ministers hold crucial talks with manufacturers with factories in the UK this week, but it appears unlikely to weaken its targets despite growing pressure from the industry.

Tipping point in 2027

Cox Automotive predicts a tipping point in 2027 as the market moves further away from internal combustion engines.

Registrations of diesel and mild hybrid electric vehicles (MHEV) are expected to fall from 6% in 2024 to just 3% by 2027, a drop of 56.8%.

Petrol/MHEV registrations are expected to decrease from 51% to 35%. Conversely, battery electric vehicle (BEV) registrations are expected to increase from 21% to 34%, a substantial increase of 165.4%, plug-in hybrid electric vehicle (PHEV) and hybrid electric vehicle (PHEV) registrations ( HEV) increasing from 22% to 28%. %.

Nothard concludes: “By 2027, we expect a crucial change in the UK automotive landscape, as the industry moves permanently away from internal combustion engines.

“With the market shares of diesel and gasoline vehicles expected to decline sharply and battery electric vehicles expected to account for more than a third of new registrations, the market is clearly accelerating towards an electrified future.

“These changes underscore the need for adaptable strategies as manufacturers and consumers embrace a new era of mobility. »