UK new car market hits major milestone as EV sales reach record high

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The UK’s new car market surpassed the two million mark in 2025 for the first time since the pandemic, driven by a surge in demand for electrified vehicles.

However, despite record-breaking sales, the industry significantly missed the government’s ambitious zero-emission vehicle (ZEV) mandate for the second year running.

According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), new car registrations rose by 3.5% last year to reach 2,020,520 units. This resurgence was bolstered by a strong performance in December, which saw battery electric vehicles (BEVs) capture 32.2% of the monthly market share – the only time the year’s mandate target was exceeded.

The shift toward electrification is undeniable, with nearly half a million (473,348) new BEVs joining the road in 2025. This volume means that almost one in four new car buyers (23.4%) chose to go fully electric.

When combined with hybrids and plug-in hybrids, electrified cars now account for nearly half of the total market, narrowing the majority held by traditional internal combustion engines to just 51.5%.

Despite this growth, the industry fell short of the 28% ZEV mandate target set by the government, missing the mark by more than 92,000 sales. The SMMT warned that the gap between “demand and ambition” is widening rather than closing, even as manufacturers expand their offerings to over 160 different EV models.

The trade body highlighted that this growth has come at a massive cost to car makers. To drive uptake and attempt to meet targets, manufacturers self-administered more than £5 billion in discounts last year, averaging roughly £11,000 per electric vehicle registered. Mike Hawes, SMMT Chief Executive, described these heavy subsidies as “clearly unsustainable.”

While the return of a purchase grant for EVs provided some relief, the industry has criticized the government for sending “mixed signals” to consumers. Factors such as a new ‘eVED’ tax scheduled for 2028 and additional charges for EV drivers in London are cited as undermining market confidence.

As the ZEV mandate target is set to rise to one-third of all sales in 2026, the SMMT is calling for an urgent government review. Hawes urged ministers to act swiftly to deliver a more vibrant and sustainable market, ensuring the UK remains competitive as international markets reconsider their own transition timelines.

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