SMMT has published its first data for 2026, showing the latest trends in vehicle registrations. Both petrol and diesels registrations continued to decline by 1.9% and 8.8% respectively, whereas Plug-in Hybrids (PHEVs) spiked by 47.3%, and hybrids grew by 4.8%. However, registrations of electric cars were flat vs January 2025.

In December 2025, registrations for EV's spiked to 32.2% market share. This could be attributed to manufacturers scrambling to register cars for the ZEV Mandate deadline to meet targets, (with flexibilities) in order to avoid hefty fines. This may explain the dip in January registrations as dealers try and shift pre-registered stock first, usually at a substantial discount.

Expect a campaign from manufacturers for new electric car sales over the coming months to ramp up and meet the ZEV mandate for 2026, which requires 33% of cars sold to be electric (with flexibilities). The EV Car Grant for specific makes and models under £37,000 - introduced part way through 2025 will help manufacturers price their EVs more competitively.

Further support comes from the Expensive Car Supplement that now has a £50,000 threshold vs £40,000 introduced on 01 April of last year, and subsequently increased to £50,000 retrospectively. In addition, there has been no new changes to the workplace salary sacrifice scheme that incentives leases via payroll to reduce employee and employer tax liabilities.

There are some headwinds for EV sales with the full VED amount being introduced last year, as well as the Expensive Car Supplement for EV’s priced at £50,000 or more, and the overhang from the pay per mile scheme called eVED being introduced in a little over 2 years.

For PHEV registrations, demand looks strong with a spike in January by 47.3% as more vehicles come to market with exceptional all electric range, in particular the surge of Chinese brands offering value for money to the consumer. However, this may also be attributed to pre-registering PHEV’s early in the year to bank some flexibilities for the ZEV mandate target to be hit, which has increased from 28% to 33% this year.

Lastly, petrol and diesel registrations continue their decline, with diesel cars having fallen to 5.5% market share as fewer manufacturers offer diesel as a choice. These companies are preferring to sell hybrid and plug-in hybrid models, which can be included in the ZEV mandate as flexibilities. Manufacturers could now be tactically pre-registering cars to provide some breathing space for an EV push towards the end of 2026, although the SMMT has yet to publish pre-registration data for December 2025 and January 2026.