Less than a year has passed since I last carried out a deep dive on industry data. In July 2023 I wrote an article to raise awareness of what key pieces of industry research were telling us at that time. The figures were and still are, important in providing a clear snapshot of the current state of the UK's vehicle recycling industry. Furthermore, this data could be used to extrapolate the anticipated ELV processing requirements over the next decade. So here we are nine months later, and armed with the latest data produced by the DVLA, ACEA and the SMMT, I can offer you an update on our progress and answer the burning question, is our industry on target to meet its goals?
But quickly, before we jump in, let me precursor my findings by making one statement: the figures I quote are not presented in such a way as to appear exaggerated and therefore more impactful, they are not based on best guess or worst case scenario. They are not designed to scare you into action, thinking the problem is worse than it is, nor are they designed to specifically sell my company's services to you. The figures are publicly available and you are free to do your own research. This is fact, not fiction, and provides our industry with the harsh reality that, from where I am sitting, no-one is either tackling or even talking about.
To summarise last years analysis, I concluded that UK ATFs could expect to see an influx in the region of 17 million ELVs over the next 5 years. With 1,951 ATFs registered in the UK at that time, I calculated that these facilities would collectively need to more than double their processing capability to meet this demand. So what happened? Well the problem has got bigger.
The DVLA reports that there are now 41.3 million licensed vehicles in the UK (not including SORN). That’s an overall increase of 1.4% in the last 12 months. 38.3 million of those UK vehicles fall under ELV Regulations:
33.6 million cars - an increase of 1.2% on last year
4.73 million vans - an increase of 0.1% on last year
So where have the increases comes from? Well it may surprise you to learn that there are roughly the same number of petrol & diesel cars on UK roads as there were a decade ago:
September 2014 – Petrol 19.42 million and Diesel 11.21 million.
September 2023 – Petrol 19.24 million and Diesel 11.35 million.
The increase in the overall number of cars on UK roads has come from the UK population increasing, more people owning cars as well as the public's adoption of electric technologies. As a society, we cannot yet boast that we have removed dirty ICE cars from our roads and replaced them with a significant number of cleaner EVs.
Let's not forget about vans. Unlike the ICE cars figures that have been fairly static, there are significantly more vans on UK roads than a decade ago:
September 2014 – 3.6 million vans on UK Roads;
September 2023 – 4.73 million vans on UK Roads.
The increase comes by and large from an additional 1.06 million diesel vans and 0.54 million battery EV vans.
So how does our vehicle recycling performance fair against this 1.3% increase in the number of vehicles that fall in scope of regulations? Well, the DVLA data reports a total of 798,363 passenger cars and light commercial vehicles (LCVs) were scrapped between January and October 2023. This figure shows a slowing down from 857,107 scrapped in the same period in 2022. These figures are the most worrying, as we regularly report that we are processing an average of 1.4 million vehicles year on year. Why the disparity? Its unlikely that the DVLA got their figures wrong. Are we to conclude that in the remaining two months of the a full year, ATFs realistically process a further 600,000 additional vehicles?
I am in no way bashing our industry, but to truly understand what and why something is occurring, we must first have confidence in the accuracy of the data being reported and produced. Only then can we go about introducing effective actions and solutions that will hopefully tackle the problem. I think that it is a lot more realistic to say that we are processing on average 1 million in-scope vehicles in a rolling twelve month period. By establishing a realistic number, we can move forward and better analyse and understand what is behind this drop-off in processing capability.
Last year, I concluded that there would likely not be an endorsement or any support from the Environmental Agencies or UK Government to increase the number of ATFs registered, and that has proved to be true. In fact, the number of ATFs across the UK has reduced by 50 sites. Did Rishi Sunak's announcement in October last year, postponing the ban on the sale of new petrol and diesel cars and vans by five years, lure people into thinking this problem isn't a priority? I really don't know. But we are nine months further down the road on this journey and the problem has only got bigger. Less than a year ago we were anticipating over 17 million elvs requiring decommissioning across the next five years, we are now looking at an eye watering 20.4 million.
Our industry isn't to blame for the state of the economy, nor what motivates vehicle owners to hold onto their car for longer. Soaring energy bills, the cost of living crisis, the lack of a second hand EV market and the prices of new EVs are likely to be big contributors. But the reality is that the average age of UK registered vehicles continues to steadily creep up, and that does have an impact on when these vehicles reach your processing facility:
Number of cars on UK roads 10 years or older has increased from 15.3 to 17.9 million.
Number of vans on UK roads 10 years or older has increased from 2.2 to 2.5 million.
Would it be fair to say that we are not making the most of a golden opportunity? We can argue all day about quality over quantity but simply put, processing well below a million elvs a year is simply not enough to make a dent in these figures. But what's it all for? Why do our businesses need to process more? We have a deadline to hit for ICE vehicles being removed from our roads as well as a commitment to our planet to end our reliance on fossil fuels by 2050. However, these motives may seem a little too far on the horizon for your business in 2024, so simply consider the fact that any increase in your business's efficiency and productivity, has a direct positive impact on your bottom line.
The figures make for tough reading but we cannot ignore them forever. ATFs need to increase processing capability and that will only be brought about by doing something different to what is currently being done. None of which I am suggesting here will harm your vehicle recycling business. In fact, just the opposite - increasing output will grow your business and your profits. If you are waiting for this or the next government to step in, then you have more confidence in our politicians than I do! The fix will only come from within the industry. This is a golden opportunity to embrace change, grow your business and ensure you remain fit for the future. It will only come about by incorporating the latest best practice, investing in newer technologies, and providing standardised training for elv technicians so they are able to safely and compliantly improve your business's efficiency and capability. If you and your business are ready for the challenge, don't delay, get in touch with us today.
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