United Kingdom Electric Vehicle Market Report and Forecast 2024-2032

United Kingdom Electric Vehicle Market Outlook

The United Kingdom electric vehicle market size was approximately USD 19.76 billion in 2023. The market is assessed to grow at a CAGR of 14.2% between 2024 and 2032, reaching a value of USD 67.45 billion by 2032.

Key Takeaways

• The UK ranks among the world’s top 5 nations for EV readiness and transition.

• Between 2023 and 2027, 71% of new vehicle launches in the UK are expected to be electric.

• The UK is among the top 10 countries in the world ranked by electric vehicle demand.

An electric vehicle is an advanced model of automobile which runs on an electric motor instead of traditionally powered diesel/petrol engines. It is gaining widespread popularity among governments and people owing to its small carbon footprint and its smart features. It travels noiselessly and provides a comfortable riding experience to the passenger.

The market is being driven by shift towards sustainability and changing consumer sentiment that is motivating manufacturers to phase out the development of ICE vehicles. The impact of rising air pollution on people’s health and the high carbon emissions generated by transport sector are accelerating the transition towards electrification of buses and cars in the United Kingdom.

Key Trends and Developments

High demand for pre-owned EVs; good government support for battery manufacturing; rise of connected and automated vehicles; and surge in demand for BEVs are the major trends boosting the United Kingdom electric vehicle market development

United Kingdom Electric Vehicle Market Trends

Pre-owned electric vehicles are extremely popular among people because of their low cost and environment friendly nature. The desire to own an electric vehicle among the younger population is also high because of its technological superiority over other automotives. The shift in consumer preferences and increased demand for clean mobility are the key factors driving the United Kingdom electric vehicle market growth.

The government is incentivising battery production in the UK to boost the adoption of electric vehicles. In 2023, it invested 27.6 million pounds in the Faraday Battery Challenge to encourage research and innovation for manufacturing electric vehicle battery, with a focus on its cost-effectiveness. The growing research around lowering the cost of battery production and addressing challenges like range anxiety is expected to lower the cost of EVs and improve their performance, thus boosting EV adoption in the coming years.

Market Segmentation

“United Kingdom Electric Vehicle Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Passenger vehicles are expected to maintain their lead in the United Kingdom electric vehicle market due to their increased sales and desire for personal mobility

Passenger vehicles are expected to dominate the United Kingdom electric vehicle market over the forecast period. Their dominance can be attributed to increased consumer demand for personal mobility, especially in emerging nations like India and China. Besides, the government’s zero emissions vehicle mandate, which says that 8/10 cars manufactured by 2030 in the UK should either be electric or hydrogen fuelled, and other similar policies supporting EV adoption are expected to provide a boost to electric mobility solutions. Moreover, with improvements in battery technology and vehicle range, the adoption of EVs is expected to register a significant uptick.

Commercial vehicles are also expected to significantly contribute to the United Kingdom electric vehicle market revenue, as companies renew their existing vehicular stock and add more vehicles to their fleet. Passenger vehicles, that are used by company’s employees for official purposes, are subject to tax rebates.

V2G is expected to gain popularity and its demand is expected to grow significantly

V2G (vehicle to grid connectivity) is expected to account for a significant United Kingdom electric vehicle market share over the forecast period. This is because V2G allows excess electricity stored in electric vehicle batteries to be transferred to power grids, which aids the consumption of power for other purposes, including lighting, heating, and cooling, among other industrial and residential purposes. With advancements in technology, the integration of V2V (vehicle to vehicle connectivity) in electric vehicles is expected to witness robust growth as commercial need for monitoring parcel delivery and passenger movement increases. V2X (vehicle to everything) is another emerging connectivity technology that can transform the experience of car ownership and driving.

Battery electric vehicles are expected to dominate the market over the forecast period

Battery electric vehicles are gaining significant popularity in the United Kingdom electric vehicle market. This is because product innovations and improvements in vehicle range are encouraging public and lowering their hesitation surrounding the use of electric vehicles. People are switching to environment friendly modes of transport to reduce their carbon footprint and create a sustainable living space, which is favourably impacting the United Kingdom electric vehicle market.

Meanwhile, fuel cell electric vehicles are also expected to witness a surge in demand as the region strengthens its technological expertise in making membrane electrode assembly and hydrogen tanks for cleaner electric vehicles.

Competitive Landscape

The collaboration among battery manufacturers, automotive companies, and government agencies to accelerate vehicle electrification, improve battery production capacity, and improve EV charging infrastructure will be crucial in shaping the market growth trajectory

Other players in the United Kingdom electric vehicle market include Honda Motor Co., Ltd., MG Motor UK Ltd., Tesla Inc., Volvo Car AB, BYD Ord Shs A, and Nissan Motor Co., Ltd., among others.

Key Highlights of the Report