In a notable shift in the UK automotive industry, Tesla has surged to become the second best-selling car in the country.
- Despite challenges posed by a global microchip shortage, Tesla’s sales have flourished, especially with the Model 3.
- The Ford Fiesta, once a favourite in the UK market, has fallen out of the top ten best-selling cars.
- Significant tax incentives and exemptions are driving companies to choose the Tesla Model 3 as their fleet vehicle of choice.
- The shift towards electric and hybrid vehicles is a key factor in reshaping the UK’s automotive landscape.
In an unexpected development within the UK automotive market, Tesla has ascended to the position of the second best-selling car manufacturer, with its Model 3 emerging as a leading choice. This success is particularly remarkable given the ongoing challenges of a global microchip shortage that has disrupted production across the industry.
The pandemic-induced disruption has resulted in the disappearance of the Ford Fiesta, previously the most popular choice among UK drivers for more than two decades, from the top ten. This deviation underlines the shifting consumer preferences towards electric and hybrid models, which now make up a significant portion of new car registrations.
Data from 2021 reveals that 1.65 million new cars were registered in the UK, a slight improvement over 2020’s figures, yet still considerably below the typical 2.3 million annual registrations. Notably, one in four of these vehicles is capable of operating in a zero-emission mode, underscoring the growing trend towards sustainable transport solutions.
Tesla has capitalised on these trends, with the Model 3 predominantly utilised as a company car due to attractive tax incentives. Company fleets can benefit from a 100% tax deduction on the vehicle cost in the first year, along with exemptions from vehicle excise duty and low emission zone charges. For individual drivers, the benefit-in-kind tax stands at a mere 1%, a considerable reduction from the 25% associated with conventional vehicles.
The broader market context shows a burgeoning demand for electrified vehicles, despite a new car inflation rate of 15% annually attributed to supply shortages. The Society of Motor Manufacturers and Traders anticipates continued growth in this sector, although they caution that public charging infrastructure is lagging behind vehicle sales, posing a potential challenge to sustained growth in electric car uptake.
Tesla’s rise to prominence in the UK market illustrates the significant shift towards electric vehicles, influenced by regulatory incentives and changing consumer attitudes.
