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UK car sales lowest in 30 years but Tesla surges ahead

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WATCH: UK car sales slump; makers warn on Brexit costs

The number of new cars sold in the UK fell by almost a third last year due to the fallout from the coronavirus pandemic and uncertainty over Brexit.

New car registrations totalled 1.63m in 2020, the Society of Motor Manufacturers and Traders (SMMT) said on Wednesday. It marked the the lowest total since 1992 and the biggest year-on-year fall — around 29% — since 1943. The 680,076-unit decline was equivalent to £20.4bn ($27.8bn) in lost turnover for the industry.

Factors behind the slump included showroom closures due to strict lockdown restrictions. Uncertainty around Brexit also hit consumer confidence.

The SMMT said new lockdowns across the UK would “further impact the industry” but said there was “potential to drive a recovery” thanks to the ongoing COVID-19 vaccine rollout.

A Tesla car uses an electric vehicle charging station in London. (Photo by Dinendra Haria / SOPA Images/Sipa USA)
A Tesla car uses an electric vehicle charging station in London. Photo: Dinendra Haria / SOPA Images/Sipa USA

While overall sales declined last year, 2020 was the “best-ever year” for electric cars. Battery and plug-in hybrid vehicles market share rose to 10.7% and the Tesla (TSLA) Model 3 was the best-selling car in December, with 5,798 new registrations.

Chart: SMMT
Chart: SMMT

Sean Kemple, managing director of Close Brothers Motor Finance, said that the surge in demand for electric vehicles was partly driven by the 2030 ban on new petrol and diesel cars.

“Demand for alternative fuelled vehicles will continue to rise,” he noted.

READ MORE: Business tells government: Pandemic recession won't end with vaccine

SMMT said investment in charging infrastructure and battery gigafactories was now key to rebooting the industry and meeting the “post-Brexit electrification challenge.” Chief executive Mike Hawes estimated that £16bn ($21.8) was needed to be spent on plug-in infrastructure, as many motorists do not have a driveway and have to park on streets.

Hawes said the last-minute Brexit trade deal was a “massive relief” to the automotive industry, but warned the Brexit trade deal would add additional costs despite tariff-free trade with the European Union.

The Ford (F) Fiesta was the best-selling car of 2020, with 49,174 new registrations.

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