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Car maker MG has insisted that a drop in electric car interest is “short term” as sales of its vehicles surged last year in the UK.
The brand, which started life in Oxford in the 1920s is now owned by SAIC, the largest of China’s state-owned car makers.
Many will know it as a sportier stablemate of the defunct Rover brand. After a hiatus following Rover’s collapse, it was relaunched by its new owners and has grown quickly through keen pricing and a generous supply of cars.
The company said that last year sales surged to £1.4bn from £1bn a year earlier.
“The ending of sales of internal combustion engine cars in the next 10 years is approaching and MG’s strong electric car offering with a good mix of internal combustion engine vehicles allows us to deal with the short term UK drop in demand for electric vehicles whilst placing it in a strong long term position to take advantage of [the] move to electric cars,” the company said in its annual report.
Its new owners also have better access to batteries for electric cars since much of the refining capacity for lithium, a crucial component, is found in China.
With 4 per cent of the UK car market MG has outsold rivals including Mini, Peugeot, Renault and Volvo in the year so far.
The £24,995 MG HS SUV is the 10th best-selling car in the UK in the year to date.
Britain’s car market is very fragmented and even big brands like Ford only command 5.7 per cent of car sales.
The news comes as other brands struggle to shift electric cars, leading them to “unprecedented” price cutting, according to the UK’s car industry lobby group. Electric vehicles, or EVs, are more expensive to buy than petrol models because of the high price of their battery packs, although the gap is narrowing.
In theory, the price per mile is much cheaper, but only when charging the cars on cheap electricity at home. Using particularly pricy fast public chargers can work out more expensive per mile than petrol.
This makes them great for high-mileage commuters with a driveway or garage.
Electric car sales so far this year have grown 13 per cent, but this has been fuelled by purchases for businesses rather than family buyers who carmakers must lure away from fossil fuels.
The car industry has been lobbying to slash VAT from public charging prices to make the vehicles more attractive to more owners.
Earlier this week, car dealer Vertu said that good supply of EVs together with weak demand was hitting prices and hurting the finances of customers who’d already bought, sending the value of their cars into a tailspin.
“Increasing numbers of previous customers encountered negative equity due to the declining value of their current car in the period of ownership,” Vertu said in an update.
The Resolution Foundation on Thursday called for higher tax on petrol and diesel cars to help make electric cars seem less expensive by comparison.
It estimated the cost of charging an EV using kerbside chargers instead of one installed at home is around £425 a year based on average mileage.
The think tank called for a gradual end to tax breaks for richer EV drivers which would make the system fairer, but also spur immediate demand as motorists aim to snap them up before they end.
Resolution Foundation principal 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 that more Chinese cars will be found on UK roads.
Professor Jim Saker, president of the Institute of the Motor Industry warned last year that Chinese cars could present a security risk to the UK.
Increasingly automated cars with millions of lines of code which could be interfered with present “major security issues”, he said.