Steady Growth in New Car Sales Amid Rising Demand for Electric Vehicles
New car sales remained stable in October, with a slight increase in registrations driven by a surge in electric vehicle (EV) demand. According to the latest data from the Society of Motor Manufacturers and Traders (SMMT), the number of new models purchased rose by 0.5 per cent year-on-year, reaching 144,948 units.
Of these, 7,028 were battery electric vehicles (BEVs), accounting for 24.5 per cent of passenger car registrations. This marks the second-highest market share for electric models this year. Electrified vehicles, including hybrid and plug-in hybrid models, outperformed traditional petrol and diesel cars, which saw a decline in sales.
Overall, EVs and hybrids made up 50.8 per cent of the new car market in October. The growth in EV sales has been attributed to increased manufacturer investment and government support through the Electric Car Grant (ECG) scheme, which was introduced in July. The Department for Transport has highlighted that this initiative has contributed to record-breaking EV sales.
Despite the positive trend, EV sales are still below the target set by the Zero Emissions Vehicle (ZEV) Mandate, which requires a 28 per cent market share in 2025. It remains uncertain whether car manufacturers can meet the binding sales targets in the remaining months of the year to avoid financial penalties.
At 386,224 total units in the first 10 months of 2025, electric car sales have already surpassed the full-year sales figures achieved in 2024. This indicates a strong upward trajectory for EV adoption.
James Hosking, managing director of AA Cars, commented on the recent rise in registrations, stating that buyer confidence is returning after a challenging year for the market. He noted that higher borrowing costs, household budget pressures, and a hesitant private sector had previously weighed on demand. However, the latest increase, led by EV sales, is seen as a positive sign of renewed momentum.
Plug-in hybrid vehicle uptake increased by 27.2 per cent, accounting for 12.1 per cent of the market. Hybrid (HEV) vehicles also saw a 2.1 per cent growth, reaching 13.3 per cent of all registrations. Fleet registrations declined slightly by 1.5 per cent, but this was offset by a small increase in private buyer registrations, which rose by two per cent.
Business registrations saw a significant increase of 32.7 per cent, although this sector remains volatile due to its relatively small volume in the overall market.
The overall new car market for 2025 is expected to surpass two million units (2.012 million) for the first time since pre-pandemic 2019. EVs are projected to account for 23.3 per cent of uptake in the year.
The SMMT’s quarterly forecasts predict that the overall market will reach 2.032 million units in 2026, representing a moderate improvement over previous expectations. The EV outlook remains at 28.2 per cent for the year. However, the SMMT warns that this would still fall short of the mandated targets for 2026, which require zero-emission vehicles to make up one in three new car registrations.
The gap between actual EV adoption and mandated targets is expected to widen in 2027, with EV share anticipated to hit 32.2 per cent against a 38 per cent target. With public and industry stakeholders looking to the government to secure the future of EVs, Transport Secretary Heidi Alexander praised the growing confidence among families to switch to electric vehicles.
She highlighted that over 30,000 people have benefited from the Electric Car Grant, saving thousands of pounds. Additionally, the number of public charge points has reached 86,000, and more help is available for installing chargers at home, making it easier and cheaper for families to transition to electric vehicles.
However, the SMMT has raised concerns about the government’s plan to end Employee Car Ownership Schemes (ECOS). These schemes play a key role in attracting top talent into the UK automotive sector, enabling employees to access the products they make and sell in an affordable manner.
The government’s proposal to make ECOS vehicles liable for company car tax could lead to the closure of these schemes, making such vehicles inaccessible for most workers. This would reduce a crucial supply of new and increasingly zero-emission vehicles into the market.
Mike Hawes, SMMT Chief Executive, emphasized that while the government has supported the UK automotive sector with EV incentives and global trade deals, scrapping ECOS would undermine progress. He warned that this move would penalize workers, reduce Exchequer income, and put green investment at risk. At a time when the Budget should fuel growth, he argued, this measure would do the exact opposite. It is time for a rethink.
