The UK's new car market achieved a significant milestone in 2025, with sales growth driven by a powerful surge in demand for electric vehicles. Preliminary data reveals a resilient automotive sector navigating economic challenges.
Market Growth and Electric Vehicle Surge
According to figures released by the Society of Motor Manufacturers and Traders (SMMT), 2.02 million new cars were registered in the UK last year. This represents an increase of approximately 3.5% compared to the 1.95 million registrations in 2024 and marks the industry's third consecutive year of growth.
The standout story, however, is the accelerating shift to electrification. Registrations for pure battery electric vehicles (EVs) jumped by 23.9% year-on-year, reaching 473,340 units. This impressive volume gave EVs a 23.4% share of the total new car market, a substantial rise from 19.6% in 2024. This performance is expected to cement the UK's position as the second-largest electric car market in Europe, trailing only Germany.
Policy Challenges and Industry Concerns
Despite the positive figures, industry leaders have voiced serious concerns about the sustainability of current growth. SMMT chief executive Mike Hawes described the two-million registration mark as a "reasonably solid result" achieved amid "tough economic and geopolitical headwinds."
He warned that the pace of EV adoption remains "too slow" and the cost to manufacturers "too high." To stimulate demand, manufacturers discounted new EVs by a staggering £5.5 billion in the UK last year, equating to an average of over £11,000 per car—a strategy Mr Hawes labelled "unsustainable."
The industry has also criticised the government's "mixed messaging" on electric vehicles. This includes contrasting policies like the electric car grant, offering up to £3,750 off a new EV, with the announcement in the November Budget of a forthcoming pay-per-mile road tax for electric cars. Mr Hawes urged ministers to bring forward a planned 2027 review of the Zero-Emission Vehicle (ZEV) mandate to create a more stable environment.
Market Leaders and Broader Trends
The best-selling models of 2025 highlight consumer preferences. The Ford Puma and Kia Sportage topped the overall charts, while the Tesla Model Y was the most popular pure battery EV. Notably, all three are SUVs.
The transition is clearly impacting traditional fuels. The market share for new petrol cars fell from 52.2% in 2024 to 46.4% last year, while diesel declined from 6.3% to 5.1%. Non-plug-in hybrids increased their share slightly to 13.9%.
Industry voices are united in calling for greater clarity. Tanya Sinclair of Electric Vehicles UK cited EVs' "strong value for money" but called for "clearer, more consistent policy signals." Ginny Buckley of Electrifying.com argued that "education will unlock the next wave of EV buyers, not uncertainty." Ian Plummer of Autotrader suggested the UK is nearing a tipping point, as nearly half of all new cars sold were electric or hybrid.
In response, Decarbonisation Minister Keir Mather pointed to a £7.5 billion government investment to drive EV uptake, including extending the car grant and supporting more public chargers.
The UK remains committed to outlawing new petrol and diesel car sales from 2030, with only zero-emission models permitted from 2035. This contrasts with the European Commission's recent softening of its 2035 ban to a 90% zero-emission target.
The SMMT will publish its confirmed statistics at 9am on Tuesday.
