Carmaker MG insists “the drop in demand for electric cars in the UK is short-term” as sales rise by 40%

Carmaker MG has insisted that a drop in interest in electric cars is “short-term” as sales of its vehicles surged last year in the UK.

The brand, which began life in Oxford in the 1920s, is now owned by SAIC, China's largest state-owned car manufacturer.

Many will know it as a sportier companion to the defunct Rover brand. After a hiatus following the collapse of Rover, it was relaunched by its new owners and has grown rapidly thanks to good prices and a generous supply of cars.

The company said sales last year rose to £1.4bn from £1bn the previous year.

“The end of sales of internal combustion engine cars is approaching in the next 10 years and MG's strong electric car offering with a good mix of internal combustion engine vehicles allows us to cope with the short-term decline. of electric vehicle demand in the UK while putting it in a strong long-term position to take advantage [the] move to electric cars,” the company said in its annual report.

Their new owners also have better access to electric car batteries, since much of the refining capacity for lithium, a crucial component, is located in China.

With 4 per cent of the UK car market, MG has outsold rivals such as Mini, Peugeot, Renault and Volvo so far this year.

The £24,995 MG HS SUV is the 10th best-selling car in the UK so far this year.

The British car market is highly fragmented and even big brands like Ford only account for 5.7 per cent of car sales.

The news comes as other brands struggle to shift to electric cars, leading to “unprecedented” price cuts, according to the UK car industry lobby group. Electric vehicles, or EVs, are more expensive to buy than gasoline models due to the high price of their batteries, although the gap is narrowing.

In theory, the price per kilometer is much cheaper, but only if the cars are charged with cheap electricity at home. The use of particularly expensive public fast chargers can be more expensive per kilometer than gasoline.

This makes them ideal for high mileage commuters who have a driveway or garage.

Electric car sales so far this year have grown 13 percent, but this has been driven by business purchases rather than family buyers whom automakers must wean off fossil fuels.

The car industry has been pushing to reduce VAT from public prices to make vehicles more attractive to more owners.

Earlier this week, car dealer Vertu said good supply of electric vehicles, coupled with weak demand, was hitting prices and hurting the finances of customers who had already purchased, causing the value of their cars to fall. in a tailspin.

“An increasing number of former customers have encountered negative equity due to the declining value of their current car during the ownership period,” Vertu said in an update.

The Resolution Foundation on Thursday called for a higher tax on gasoline and diesel cars to help make electric cars look less expensive in comparison.

The cost of charging an electric vehicle using kerbside chargers rather than one installed at home was estimated to be around £425 a year based on average mileage.

The think tank called for a gradual end to tax breaks for wealthier EV drivers, which would make the system fairer but also spur immediate demand as motorists aim to take advantage of them before they end.

Resolution Foundation chief economist Jonathan Marshall said: “If the UK is to reach net zero by 2050, we need to decarbonise travel – and fast.”

Meanwhile, not everyone is happy to see more Chinese cars found on UK roads.

Professor Jim Saker, president of the Institute of the Motor Industry, warned last year that Chinese cars could pose a risk to UK security.

Increasingly automated cars with millions of lines of code could be interfered with today's “significant safety issues,” he said.