Dealers call for greater government support amid market uncertainty

The latest outlook survey from the National Franchised Dealers Association (NFDA) reveals widespread pessimism among dealers, reflecting their fears about navigating financial pressures and regulatory changes.

With rising costs, uncertainty surrounding the transition to electric vehicles (EVs), and the introduction of new taxes, dealerships are urging the government to provide more incentives and infrastructure investments to ensure future stability for the industry.

The 2025 Outlook Survey provides valuable insights into the key challenges facing the industry while also reflecting on critical trends from 2024, including footfall and overall dealer sentiment.

A significant concern among dealers is the need for greater government support, especially in the context of the ongoing government consultation on the ZEV mandate and phase-out date.

Many dealers are calling for incentives, grants, and investments in charging infrastructure to help drive the transition to electric vehicles. They also highlighted the continued benefits of hybrid vehicles beyond 2030 as part of the long-term solution.

The survey revealed that 87% of dealers cited cost as a key barrier to EV adoption, tied with concerns about the availability of charging infrastructure. This reflects findings from NFDA’s 2024 Consumer Attitude Survey, where high EV prices were the leading reason why customers were hesitant to switch to electric vehicles.

Looking ahead to 2025, the outlook is largely pessimistic. 71% of respondents indicated they are pessimistic about the trading environment for the year, while only 29% were slightly optimistic about the market’s stability and growth prospects.

Running costs, which include business rates and the rise in employers’ National Insurance, were identified as the top concern for dealers in 2025, with 52% of dealers ranking it as their most pressing issue.

The rise in Employers’ National Insurance from 13.8% to 15% in April 2025 adds to the financial pressures that dealers are already facing. Additionally, the introduction of Vehicle Excise Duty on EVs is set to impact dealerships and their customers.

The ZEV mandate and the state of charging infrastructure also emerged as significant factors, with 31% and 34% of dealers ranking them, respectively, as major areas of concern.

In response to these pressures, 50% of dealers noted that the number of discounts on electric vehicles has increased dramatically over the past six months, and 57% reported offering customer incentives, such as free home charger installation, to drive sales.

NFDA chief executive Sue Robinson, commenting on the findings of the 2025 Outlook Survey, highlighted the need for stronger government intervention to support the transition to EVs:

“The shift to EVs is a generational transformation, and our members fully support the decarbonization of transport. However, without sufficient support—such as grants and investment in charging infrastructure - the transition risks stalling. The advantages of hybrids beyond 2030 must also be recognised.”

She also warned of broader industry challenges in 2025: “Dealers are facing a difficult year, with mounting costs and regulatory uncertainties. It is crucial that the Government listens to the industry’s concerns—particularly regarding Employers’ National Insurance increases and new taxation on EVs. The UK automotive sector is a vital part of the economy, and NFDA will continue lobbying for policies that safeguard its future.”

Conducted between 10 and 24 January, the survey gathered 46 responses from dealership groups representing approximately 165 sites across the country.