British car buyers were handed a staggering £5.5 billion in discounts on electric vehicles last year, as manufacturers scrambled to meet stringent government sales targets and tempt drivers away from petrol and diesel.
Billions in Incentives to Spark Demand
According to the Society of Motor Manufacturers and Traders (SMMT), the incentives amounted to an average of £11,000 off each electric car sold. This massive financial push was deemed essential to encourage consumer uptake, despite many electric models still carrying a significantly higher price tag than their fossil-fuel equivalents.
The industry was not just acting out of generosity. Manufacturers faced the prospect of heavy fines if they failed to meet the Zero Emission Vehicle (ZEV) mandate, which required 28% of new registrations to be pure battery electric in 2025. Companies that missed their target typically struck deals with rivals who had exceeded theirs to avoid penalties.
A Target Met Once, With Tougher Goals Ahead
The strategy saw some success. Battery electric vehicles accounted for 32.3% of all new cars registered in December 2025, making it the only month last year where the 28% mandate was achieved. Overall, registrations of pure battery EVs grew by 23.9% year-on-year to 473,340 units.
However, the challenge is set to intensify. The sales target for 2026 rises to a stricter 33% threshold. With the pressure mounting, industry leaders are urgently calling on the Labour government to bring forward a promised review of the ZEV mandate, hoping for a relaxation of future goals.
Mike Hawes, chief executive of the SMMT, stated: “The pressure is still very much on the industry.” He warned of the impact of the UK’s “mixed messaging” on electric vehicles, contrasting purchase grants with the new pay-per-mile road tax announced for EVs in the November Budget.
Market Shifts and Policy Uncertainty
The broader new car market grew by 3.5% in 2025, reaching 2.02 million registrations. The Ford Puma and Kia Sportage were the best-selling models overall, while the Tesla Model Y was the top pure electric car.
The market is also seeing a notable rise in Chinese influence. Cars made in China accounted for 13.5% of the UK market, with Chinese-owned brands like MG and BYD making up nearly one in ten new cars sold.
Despite the growth, Mr Hawes cautioned that the pace of EV adoption is “still too slow and the cost to industry too high.” He urged the Government to bring forward its review of the ZEV mandate from early 2027 to create a more “sustainable industry.”
Tanya Sinclair of Electric Vehicles UK echoed the call for “clearer, more consistent policy signals,” while Ian Plummer of Autotrader suggested the UK “could be getting close to the tipping point” as nearly half of all new cars sold were electric or hybrid.
The UK remains committed to outlawing new petrol and diesel car sales from 2030, with a full zero-emission mandate from 2035, a timeline recently softened by the European Commission.
