The Society of Motor Manufacturers and Traders (SMMT) has released a new report, In It Together: Why Every Sector Wins with EV Volume, emphasising how the widespread adoption of electric vehicles (EVs) extends benefits far beyond the automotive industry.
The publication, launched at the SMMT Electrified event, highlights the interconnected nature of the EV market, illustrating how various industries play a crucial role in both driving and benefiting from increased EV uptake. The report presents a powerful argument: by working together to expand EV volumes, multiple sectors can create a virtuous cycle of economic growth, cleaner mobility, and meaningful social change.
Expanding the EV market: a win for all
The transition to zero-emission vehicles (ZEVs) is not an isolated effort by automotive manufacturers alone. It influences and sustains multiple industries, including infrastructure providers, insurance firms, energy suppliers, and maintenance services. The growing volume of EVs on the road translates into higher demand for charging infrastructure, insurance policies tailored for EVs, maintenance services, and electricity distribution. Stronger EV market growth ensures a robust supply chain, a thriving second-hand market, and increased grid investments, which in turn facilitate broader transport sector decarbonisation.
Infrastructure, insurance, and maintenance: key players in EV growth
A higher volume of EVs necessitates improvements in infrastructure, particularly charging networks. This is essential not just for personal vehicles but also for commercial transport, including vans and heavy goods vehicles (HGVs). The van market, governed by the Zero Emission Vehicle Mandate, requires a rapid transition to zero emissions. Expanding the EV fleet overall encourages investments in grid connections and depot charging—critical components in de-risking investment in zero-emission HGVs. With most new trucks required to be zero-emission by 2035, the urgency to establish a supportive ecosystem is clear.
Similarly, the insurance sector must adapt to an evolving vehicle landscape. More affordable and accessible EV insurance policies would encourage hesitant consumers to switch. Furthermore, adequate maintenance provisions must be available, ensuring that EV servicing remains cost-effective and accessible. These combined efforts help facilitate a seamless transition for businesses and individual consumers alike.
The role of government and policy support
While demand for EVs is increasing—rising tenfold from 37,850 buyers in 2020 to 381,970 in 2024—this surge has largely been driven by manufacturers absorbing enormous costs to make EVs more affordable. The Zero Emission Vehicle Mandate requires manufacturers to ensure that a specific percentage of their new vehicle sales are EVs. However, without sufficient consumer demand, these targets may lead to a shrinking overall market, ultimately reducing ZEV volumes.
To ensure success, government intervention is necessary. Purchase incentives, such as halving VAT on new EV purchases, could boost demand by an additional 15%, putting more than two million new EVs on UK roads by 2028. This would result in a CO2 emissions reduction of over six megatonnes per year—equivalent to a sixth of the UK’s annual aviation emissions.
Market growth vs. target compliance
The EV transition must prioritise market expansion over mere compliance with regulatory targets. The report stresses that imposing supply mandates on manufacturers without addressing consumer demand risks undermining the industry’s efforts. Instead, holistic policies that stimulate demand while easing financial burdens on manufacturers will lead to a healthier, more sustainable EV market.
The “virtuous circle” of EV growth
By ensuring a high-volume EV market, the UK can maintain its position as a leading destination for EV production and innovation. Increased demand fosters more investment in local manufacturing, infrastructure, and related services, creating jobs and boosting the economy. This collaborative approach ensures that all sectors—from energy providers to local governments—share in the benefits of the EV revolution.
A call to action
SMMT CEO Mike Hawes encapsulates the report’s message: “The EV market does not exist in a vacuum, rather a whole ecosystem in which it supports a wide array of industries. And that ecosystem is dependent on volume demand, not market percentages, to thrive.”
The report urges industries, policymakers, and stakeholders to unite in fostering demand-driven growth. By prioritising EV volume expansion and securing essential incentives, the UK can accelerate the transition to zero-emission transport, ensuring a prosperous and sustainable future for all.
Hawes notes: “We must all move together, and with every sector playing its part, we stand to benefit from a virtuous circle of mutual growth. Industry, the economy, environment and society will profit, with widely accessible zero emission mobility meeting the needs of people from all backgrounds. Greater EV volumes also make the UK a more attractive place to build those in-demand products, benefitting the local and national economy.”
The message is clear: We’re in this together, and none of us can afford to fail.
