EVs account for one-in-four new registrations, latest figures show

Electric cars account for a quarter of all new cars sold in the UK, but they took an increasing share of a falling market, according to the latest registration figures for February from the Society of Motor Manufacturers and Traders.

Total new car registrations were down one per cent over February last year, marking a fifth consecutive drop in the market, but there was a significant four per cent fall in fleet registrations, which have been the sector driving recent growth in the market.

Private registrations rose by 4.6 per cent, however, and the EV market continues to forge ahead as a percentage of overall registrations – February saw EVs take a 25.3 per cent market share, compared with 17.7 per cent for the month last year.

Will electric car registrations continue to increase?

The SMMT has predicted a further surge in electric car take-up this month (March), as buyers seek to avoid what will in many cases be steep hikes in the cost of road tax (Vehicle Excise Duty/VED) for EVs, when the electric car exemption ends in April. The VED change will add £2,125 to the cost of ownership of an EV costing more than £40,000, payable over the first six years after registration and is seen as a significant disincentive to faster growth in the EV sector.

“Relative to the rest of the market, EVs are disproportionately affected as higher production costs mean the average EV retails above the Expensive Car Supplement threshold, a threshold which remains unchanged since its introduction in 2017,” the SMMT says, adding: “The introduction of this measure also risks disincentivising the used market as well as the new, impeding a faster, fairer transition.”

Mike Hawes, SMMT CEO, has cautiously welcomed growth in the EV market. “The good news is that electric car uptake is increasing, albeit at huge cost to manufacturers in terms of market support,” he says. “With the all-important March number plate change now upon us, and tax changes taking effect in April that will, perversely, dissuade EV purchases, we expect significant demand for these new products next month - but, long term, EV consumers need carrots, not ever more sticks.” 

Other industry voices have sounded a note of caution too. Jon Lawes is Managing Director at Novuna Vehicle Solutions, one of the UK’s largest fleet operators:

“A rise in EV registrations suggests growing consumer interest, but the broader outlook remains uncertain,” he says. “With the 2030 ban on new petrol and diesel cars looming, concerns are mounting over future tax rises, complicating long-term fleet planning. Manufacturers, reliant on incentives to meet ZEV mandate targets, now face an unpredictable landscape. Combined with geopolitical instability, this could strain supply chains and push prices higher, dampening momentum just as the sector needs acceleration.” 

Jamie Hamilton, automotive partner and head of electric vehicles at analysts Deloitte, said the February sales dip would compound pressures for manufacturers facing cost increases due to National Insurance Contribution hikes, but added: "There is hope that the government's recent consultation on the Zero Emission Vehicle Mandate will deliver clarity for the industry. However, successfully navigating the next phase of the mandate and beyond will require a coordinated approach - manufacturers, charging point operators, finance providers, and government bodies must be enabled to work together in addressing the remaining barriers to EV adoption.“

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