With autumn well under way and only two more months of data gathering to conclude 2025, we can look back over the last 10 months and see how the new car market has fared in the UK.

There were four notable events this year that may have had an impact on new car registrations:

1. The ZEV mandate that guides manufacturers to sell a percentage of electric vehicles rose to 28% in January, with further flexibilities introduced in April to support manufacturers. Additionally the UK Government reiterated that the sale of new pure petrol and diesel cars will end in 2030, with hybrid vehicles and plug-in hybrid vehicle sales ending on 01 January 2035.
   
2. Vehicle Excise Duty was introduced to electric cars for the first time from 01 April 2025 and set at £195 per year.
   
3. The Expensive Car Supplement was introduced for electric cars priced at £40,000 or over that were first registered on or after 01 April 2025 at an additional cost (on top of VED) of £425. This does not apply retrospectively to EVs that were registered prior to this date.
   
4. The electric car grant was reintroduced in the UK in July this year as a two tier grant for electric vehicles priced at £37,000 or less that met government mandated metrics. Band 1 vehicles qualify for a £3,750 grant for the most sustainable models with the lowest carbon footprint and Band 2 vehicles qualify for a £1,500 grant. Vehicles that do not fall into Band 1 or Band 2 categories fail to attract any grant. So far the scheme covers 40 models.
   

How did registrations fair against the above headwinds and tailwinds?

Start of 2025

Petrol vehicle registrations started the year in January capturing 50.3% market share, with diesel registrations at 6.2% market share. Battery electric vehicles, having been successfully sold in adequate numbers the previous year to satisfy the ZEV mandate, captured 21.3% market share.

Whilst hybrids accounted for 13.2% market share and plug-in hybrids were at 9.0% market share.

Mid-Year

By mid-year in June, there were significant changes. Petrol registrations slid to 46% market share and diesel registrations declined to 5.6%. Battery electric car registrations rose to 24.8% market share, hybrids dropped back to 12.5% and plug-in hybrids surged to 11.2% market share, prior to the electric car grant being introduced and after VED and the Expensive Car Supplement were introduced.

Autumn

A clearer picture showing the changing direction of market sentiment is reflected in the October registrations. Petrol and diesel registrations at the start of the year combined, accounted for 56.5% of market share. They now account for less than half of vehicle registrations for the second consecutive month at 49.2%, with petrol having fallen to 44.4% and diesel falling to 4.8%.

Hybrid registrations recovered lost ground to 13.3% market share, with plug-in hybrids nudging up to 12.1%.

But its battery electric cars that now account for more than a quarter of all new car registrations in the UK, at 25.4% market share.

The steady rise of the electric car is indicative of registrations that are seemingly unaffected to a degree by the introduction of taxes, but perhaps in part helped by the reintroduction of the grant to some electric cars. For manufacturers whose EVs did not qualify for the grant, some have discounted at the same, or higher levels to stay competitive.

What’s clear is that with EVs attracting over a quarter of all car registrations in the UK, and with a steady decline of petrol and diesel registrations - customers are opting for more electric and electrified cars in 2025.

Source: SMMT