9:10 am, January 6, 2026
New car registrations topped two million last year for the first time this decade, but carmakers discounting new EV sales is ‘unsustainable’.
That’s the view of the Society of Motor Manufacturers and Traders (SMMT), as it revealed data for December and 2025.
Registrations leapt by 3.9% to 146,249 units in December, and by 3.5% overall last year, sending total registrations over the 2.02m mark.
The previous year recorded 1.95m, with 2025 representing the third consecutive year of growth.
Registrations of pure battery EVs were up 23.9% year-on-year to 473,340. This was a market share of 23.4%, up from 19.6% in 2024.
The volume is expected to place the UK as the second largest EV market in Europe, behind Germany.
The ZEV Mandate for 2025 set a headline target for at least 28% of cars sold by each manufacturer in the UK last year to be zero-emission.
But the Energy and Climate Intelligence Unit think tank has estimated the actual sales requirement to avoid penalties was just 20.4%, as companies also get credits for selling large numbers of lower emission petrol and diesel cars.
SMMT chief executive Mike Hawes said: ‘The new car market finally reaching two million registrations for the first time this decade is a reasonably solid result amid tough economic and geopolitical headwinds.
‘Rising EV uptake is an undoubted positive, but the pace is still too slow and the cost to industry too high.’
Hawes said manufacturers discounted new EVs by a total of £5.5bn in the UK last year, which is equivalent to an average of more than £11,000 per car sold.
He described this as ‘unsustainable’.
‘Government has stepped in with the Electric Car Grant, but a new EV tax, additional charges for EV drivers in London and costly public charging send mixed signals,’ he said.
‘Given developments abroad, government should bring forward its review and act urgently to deliver a vibrant market, a sustainable industry and an investment proposition that keeps the UK at the forefront of global competition.’
Hawes urged the government to bring forward a review of the Zev mandate planned for early 2027 to create a ‘sustainable industry’.
The best-selling cars overall last year were the Ford Puma and the Kia Sportage, while the most popular pure battery EV was Tesla’s Model Y.
What the industry thinks
Close to tipping point
‘In the UK, we could be getting close to the tipping point on electrified vehicles, as nearly half of all new cars sold last year were electric or hybrid – and pushing overall sales past the two million mark.
‘Drivers now have more choice of models than ever before and a declining EV price premium thanks to the industry’s efforts, but if we are going to reach ever-tougher targets under the ZEV mandate we still need to do more to encourage demand. That should include broadening the range of models eligible for Electric Car Grants and cutting the cost of public charging.’
Ian Plummer, chief customer officer, Auto Trader
Sales upturn to continue
‘The return of the new car market to over two million registrations in 2025 is very welcome news. Our own enquiry data suggests that the upturn in sales reported by the SMMT is set to continue into the first quarter of 2026.
‘Consumer intent to switch to electric remains strong, despite the announcement of a new pay-per-mile tax scheme in 2028.’
Philipp Sayler von Amende, global chief commercial officer, Carwow
Rise built on fragile foundations
‘The rise to 2.02 million registrations highlights a gradual recovery in the market, but this is built on fragile foundations.
‘Heavy reliance on EV-led growth suggest underlying demand remains weaker than the totals imply. At the same time, residual value pressures continue to unsettle the used EV market and concerns persist that tactical activity and the rapid expansion of Chinese brands were essential to achieving 2025 growth.
‘The reliance on external forces and discount-led EV uptake risks may mask deeper structural challenges that could constrain the sector’s performance in the year ahead.
‘The sector enters 2026 with renewed energy but there is a clear need for stability and confidence across both new and used markets.’
Philip Nothard, insight director, Cox Automotive
Buyers need confidence
‘Moving EV sales from one in four new car sales today to one in three by the end of the year won’t happen on momentum alone. Alongside the growing choice of EVs, buyers need confidence, clear messaging and policy stability from government.
‘Research carried out by Electrifying.com and the AA, based on responses from more than 12,000 UK drivers, shows that 75% of non-EV drivers still don’t feel confident about the prospect of driving an electric car – highlighting that education, not uncertainty, is what will unlock the next wave of EV buyers.’
Ginny Buckley, chief executive, Electrifying.com
Differing messages will slow down EV adoption
‘Despite positive growth in the electric vehicle market in the last year, albeit still behind the target, there is uncertainty amongst manufacturers regarding the regulation of EVs, and potential changes to the Zero Emission Vehicle target. Differing messages to consumers around affordability, and changes to EV legislation, will also play a part in more cautious adoption of plug-ins.
‘Meanwhile, investment into charging may also be slowing, leaving a crucial gap in the development of infrastructure needed to boost EV uptake. Continued investment and development in charging infrastructure, along with greater clarity for both the consumer and manufacturers, will be crucial in driving further uptake.
‘The outlook for car sales in 2026 could be positive, with the expectation that interest rates will fall and thus a significant reduction in borrowing costs for households, encouraging consumers to purchase new cars.’
Jamie Hamilton, automotive partner and head of electric vehicles, Deloitte
