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

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

Cox Automotive’s director of insight, Philip Nothard, explained: “The evolving landscape is causing many OEMs to re-evaluate their 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 experience reduced vehicle availability, reflecting OEMs’ focus on aligning supply with actual demand.”

Cox Automotive’s predicts nearly two million new car registrations next year (2025), marking a slight increase of 3.6% over 2024.

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

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

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

These import levels underline how global OEM decisions directly influence vehicle availability for UK consumers and fleet operators.

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

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

Under Zero Emission Vehicle (ZEV) mandate.which became law in January, ZEVs must this year account for 22% of an OEM’s new car registrations and 10% of new van sales, or face fines of £15,000 for every vehicle sold in off target.

These proportions will increase annually until 2030, when they will be 80% and 70%, respectively. But the reality of the goals is not as clear-cut as this, as there are several alternative ways manufacturers can meet compliance.

These are intended to mitigate the risks associated with product investment cycles and uncertainty about sales volumes.

Ministers hold critical discussions with manufacturers with factories in the UK this week, but looks unlikely to loosen targets despite mounting pressure from the industry.

Turning 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 (MHEVs) are projected to fall from 6% in 2024 to just 3% by 2027, a 56.8% drop.

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

Nothard concludes: “By 2027, we expect to see a fundamental shift in the UK automotive landscape as the industry moves decisively away from internal combustion engines.

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

“These changes underscore the need for adaptive strategies as both manufacturers and consumers embrace a new era of mobility.”