The UK new car market passed the two million mark in 2025 for the first time since the pandemic, with almost one in four buyers choosing an electric vehicle.
New figures published by the Society of Motor Manufacturers and Traders show 2,020,520 new cars were registered last year, an increase of 3.5 percent compared to 2024.
December saw registrations rise by 3.9 percent to 146,249 vehicles, driven largely by private buyers, where demand jumped by 16 percent.
Battery electric vehicles accounted for 32.2 percent of registrations in December, the only point in the year where the UK’s zero emission vehicle target of 28 percent was exceeded.
Across the full year, internal combustion engine cars remained the single largest powertrain but their share narrowed to just 51.5 percent as demand for electrified vehicles continued to grow.
Almost half a million new battery electric vehicles were registered in 2025, with 473,348 joining UK roads, more than the combined total of 2021 and 2022.
Electric vehicles accounted for 23.4 percent of all registrations, a significant increase but still short of the government’s 28 percent target, widening the gap between ambition and consumer demand.
Hybrid vehicles also performed strongly, with registrations up 7.2 percent to take a 13.9 percent share of the market, while plug in hybrids were the fastest growing powertrain, rising by 34.7 percent to represent 11.1 percent of sales.
Private car registrations rose by 4.5 percent to 779,587 units, although they still made up just 38.6 percent of the market, while fleet and business registrations increased by 2.6 percent and 8.8 percent respectively.
Manufacturers now offer more than 160 battery electric models, with at least 60 more expected in 2026, but industry figures show uptake has grown by only 23.9 percent despite that expanding choice.
The SMMT says car makers subsidised electric vehicle sales by more than £5 billion in 2025, equivalent to around £11,000 per electric car, warning that this level of support is unsustainable.
While average new car carbon dioxide emissions fell by just over 10 percent to 91.8g per kilometre, the UK target will require one in three new cars sold to be electric next year.
Mike Hawes said the results highlight both progress and growing pressure on the industry.
“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.
“With mixed signals on taxation and charging costs, 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 competitive.”
The industry is now urging government to accelerate its review of the Zero Emission Vehicle mandate to ensure the transition supports consumers, manufacturers and the wider economy.
