The UK's new car market has accelerated into 2026 on a high note, with official figures revealing a significant annual increase driven overwhelmingly by surging demand for electric vehicles.
Market Growth and EV Milestones
According to data released by the Society of Motor Manufacturers and Traders (SMMT), 2.02 million new cars were registered in 2025. This marks a solid 3.5% increase compared to the 1.95 million units registered in 2024 and represents the industry's third consecutive year of growth. The total also signifies the market finally surpassing the two-million-unit threshold for the first time this decade.
The standout performer was the pure battery electric vehicle (EV) sector. Registrations of new EVs soared by 23.9% year-on-year, reaching 473,348 units. This impressive volume gives electric cars a 23.4% share of the total new car market, a substantial rise from 19.6% in 2024. This growth is expected to cement the UK's position as the second-largest electric car market in Europe, trailing only Germany.
Industry Voices: Progress Amid Challenges
SMMT Chief Executive Mike Hawes described the two-million milestone as a "reasonably solid result" achieved against a backdrop of tough economic and geopolitical conditions. While acknowledging rising EV uptake as an "undoubted positive," he cautioned that the pace of transition remains "too slow and the cost to industry too high."
To stimulate consumer demand, Mr Hawes revealed that manufacturers discounted new EVs by a colossal £5.5 billion in the UK last year, equating to an average discount of more than £11,000 per electric car sold.
The Road Ahead: Policy and Perception
The figures come in the first full year of the Labour government's Zero-Emission Vehicle (ZEV) mandate, which set a target for at least 28% of each manufacturer's new car sales to be zero-emission in 2025. The market's 23.4% EV share indicates progress, though it highlights the scale of the challenge ahead for future, more ambitious targets.
Industry leaders emphasised the need for sustained support to maintain momentum. Tanya Sinclair of pressure group Electric Vehicles UK stated that while EVs offer "strong value for money" and "best-in-class performance," the market requires "clearer, more consistent policy signals" to convince more drivers to switch.
Ginny Buckley, founder of Electrifying.com, argued that "education will unlock the next wave of EV buyers, not uncertainty." Meanwhile, Ian Plummer from Autotrader suggested the UK "could be getting close to the tipping point on electrified vehicles," noting that "nearly half of all new cars sold last year were electric or hybrid."
The data paints a picture of a UK automotive industry in transition, successfully growing overall sales while undergoing a fundamental shift towards electrification, albeit with significant investment and ongoing calls for government and industry alignment to secure future growth.
