However, this increase was not enough to offset a -17.1% decline in new diesel registrations. Diesel market share declined by more than five percentage points to 42.0%. Because diesel cars typically consume less fuel than gasoline equivalents they emit, on average, 15-20% less CO₂. About half of last year’s overall CO₂ rise was attributable to this decline in diesel demand, the report said. Meanwhile, a substantial fall in registrations of smaller cars also had a significant effect, as falling consumer confidence hit the lower end of the market.

The increase in the fleet average new car CO₂ figure follows 19 years of reductions resulting from investment in new, advanced engine, fuel and battery technology, as well as the use of lightweight materials such as aluminium and composites.

These ongoing improvements mean average CO₂ is still a third (-33.1%) lower than in 2000. The light commercial vehicle sector, 96% of which is powered by diesel, has also shown impressive progress—new vans last year reduced CO₂ by -4.8% to a new low of 165.4 g/km.

The report highlights the importance of internal combustion engines in the UK’s journey to a low carbon future, with 99.5% of the UK’s 2.5 million strong new car market still powered, wholly or in part, by gasoline or diesel.

Alongside advances in gasoline and diesel vehicle technology, the industry is investing heavily in alternative technologies. More than a fifth of new car models now available are zero-emission capable, yet they make up just 5% of sales. For pure battery-powered vehicles, take-up is even lower (0.5%).

Alternatively fueled vehicles (AFV) registrations rose by 34.8% in 2017 to 119,821 units. AFVs emitted on average 44% lower CO₂ than the market average. AFV registrations consistent of hybrid electric vehicles (HEVs); plug-in hybrid electric vehicles (PHEVs); battery electric vehicles (BEV); and fuel cell electric vehicles (FCEV).

Registrations of HEVs rose by 40.0%, PHEVs by 25.5% and BEVs rose by 32.5% in 2017. HEVs, PHEVs and BEVs respectively made up 60.6%, 28.1% and 11.4% of the AFV market and 2.9%, 1.3% and 0.5% of the overall new car market in 2017.

Incentives have been scaled back and new tax measures imposed on hybrid and plug-in hybrid cars are undermining consumer and industry ambition for these technologies, SMMT said. Given hybrid vehicles outsell battery electric vehicles by a factor of 2.5 to 1, they will be an important part of the transition to the zero emission roads of the future.

The industry shares government’s vision of a low carbon future and is investing to get us there—but we can’t do it overnight; nor can we do it alone. The anti-diesel agenda has set back progress on climate change, while electric vehicle demand remains disappointingly low amid consumer concerns around charging infrastructure availability and affordability.

To accelerate fleet renewal, motorists must have the confidence to invest in the cleanest cars for their needs—however they are powered. A consistent approach to incentives and tax, and greater investment in charging infrastructure will be critical. Now, more than ever, we need a strategy that allows manufacturers time to invest, innovate and sell competitively, and which gives consumers every incentive to adapt.

—Mike Hawes, SMMT Chief Executive

The SMMT UK New Car CO₂ 2018 report charts the UK automotive industry’s progress on new vehicle CO₂ reduction over two decades, and sets out its vision for the transition to low carbon motoring. It outlines the technology advances and electrification strategies of car manufacturers selling in the UK, with many committing to offer electric models across their entire product ranges by at least 2025.

The report also calls for collective action from all stakeholders, including industry, government, fuel and energy companies, to overcome fears around range anxiety, accessible charging and affordability.