9:39 am, February 5, 2025
Electric cars snapped up a fifth of January’s new car market as total registrations fell for the fourth month in a row, latest figures show.
Data from the Society of Motor Manufacturers and Traders (SMMT) shows 139,345 new cars were registered in January – a 2.5% fall year on year.
Auto Trader described it as a ‘lacklustre’ start to the year, while AA Cars said customers ‘remain cautious’ when it comes to big-ticket items such as new cars.
The month saw registrations slump in both private and fleet markets – down 0.5% and 3.7% respectively – although EVs boomed.
Battery electric vehicles soared by 41.6% to take a 21.3% market share, while hybrids also saw chunky rises – hybrids and plug-in hybrid snatched a 13.2% and 9.0% market share respectively.
The SMMT said that despite the boom in EVs, market share ‘still remains short’ of the 22% target for 2024, and ‘even further behind’ the 28% quota for this year.
The body again called for an ‘urgent review’ of the Vehicle Emissions Trading Scheme, otherwise there will be ‘significant negative consequences for the market’.
It also reiterated the need for the government to look at the ‘Expensive Car Supplement’, which kicks in for cars costing more than £40,000, as the majority of EVs cost above this threshold. Buyers of new electric cars will have to pay this additional tax from April.
Meanwhile, diesel car registrations dropped by 7.7% and took a 6.2% market share, while petrol cars dropped the most at 15.3% but still account for over 50% of the market.
The SMMT also said that it expects the new car market to decline ‘slightly’ in 2025 by 0.2% to 1.95 million units, with BEV uptake rising by 20.9% to 462,000 – a 23.7% market share and short of the mandated 28% ZEV Mandate target.
The Kia Sportage took an early lead in the sales charts for 2025 with 3,476 units to its name, followed by the Nissan Qashqai at 3,421 and Vauxhall’s Corsa at 3,379.
Nissan is currently the top-selling new car brand thanks to the Juke taking an additional 2,320 registrations to the Qashqai’s total.
Commenting on January’s data, SMMT chief Mike Hawes said: ‘January’s figures show EV demand is growing – but not fast enough to deliver on current ambitions.
‘Affordability remains a major barrier to uptake, hence the need for compelling measures to boost demand, and not just from manufacturers. The application, therefore, of the “Expensive Car Supplement” to VED on electric vehicles is the wrong measure at the wrong time.
‘Rather than penalising EV buyers, we should be taking every step to encourage more drivers to make the switch, helping meet government, industry and societal climate change goals.’
What the industry says
A lacklustre start
January marked a somewhat lacklustre start to 2025 for the new car market, as registrations fell for the fourth consecutive month. A look under the bonnet however does offer some optimism for the industry, with visits to our new car platform accelerating over 20% following the festive slowdown as buyers begin searching for their next new car in earnest ahead of the calendar’s busiest car buying period.
We can also see the big uplift in electric car enquiries made on our platform late last year already play through into the market. The significant surge in EV sales last month will come as some relief to manufacturers facing another steep increase in ZEV mandate targets this year. If it’s to meet the required 28% of all new car sales, there’ll be no let-up in pressure to maintain electric vehicle demand, likely resulting in very competitive offers to entice buyers over the coming months.
Ian Plummer, commercial director, Auto Trader
Economic factors impacting decisions
Car-buying decisions have been impacted by economic factors, such as higher interest rates and persistent inflation, and some consumers remain cautious about making big-ticket purchases. However, improving economic conditions are expected to boost confidence in the new car market.
Consumer interest in greener vehicles is on the rise. Our data reveals that over half of buyers in the market for a car this year are considering a more environmentally friendly option, whether a hybrid or fully electric vehicle.
The price of the 20 most-searched-for EVs and hybrids on our platform dropped by 10% in Q4 2024 compared to the previous year, which suggests affordability is improving. However, it remains a potential barrier for some, with traditional petrol models still accounting for a significant share of private demand.
James Hosking, managing director, AA Cars
Strong interest in BEVs will be welcome to OEMs
The SMMT registration figures show that demand for battery electric vehicles (BEVs) rose significantly last month, and Carwow data tells us a similar story. The BEV enquiries generated via the Carwow platform and passed on to dealer partners increased by 29%, year-on-year, in January, while PHEV enquiries also saw a similar increase, up 23%.
This means BEVs now comprise a growing proportion of the enquiries overall that we direct to our retailer partners. In January, BEVs and PHEVS made up 52% of all enquiries on Carwow.
This strengthening interest in BEVs will be welcome news to OEMs as they strive to meet stricter ZEV targets. It represents a continuation of the strong BEV demand we saw over the Christmas period – in terms of vehicle configurations and enquiries for new and used stock, and we expect this trend to continue through the first quarter.
Philipp Sayler von Amende, chief commercial officer, Get Your Car at Carwow
