6th Jan 2026 10:00
(Alliance News) - UK new car registrations rose above two million in 2025 for the first time since the pandemic, as growth in electric vehicle sales helped lift the market despite ongoing concerns about affordability, industry data showed on Tuesday.
According to figures from the Society of Motor Manufacturers & Traders, new car registrations totalled 2.02 million in 2025, up 3.5% year-on-year and marking the third consecutive annual increase in the market.
Registrations rose 3.9% in December alone to 146,249 vehicles, supported by a strong finish from private buyers, where volumes jumped 16%. Fleet registrations dipped 2.4% on the month, while business demand rose 15%.
Electrified vehicles continued to gain share, narrowly missing becoming the majority of the market over the full year.
Battery electric vehicles accounted for 23% of registrations in 2025, up sharply from 20% in 2024, with 473,348 new BEVs registered during the year.
That total exceeded combined registrations in 2021 and 2022 and is expected to make the UK the second-largest electric vehicle market in Europe by volume.
December proved a standout month for EVs, with BEVs accounting for 32% of registrations, the only time in 2025 that sales exceeded the government's zero-emission vehicle mandate target of 28%.
Hybrid electric vehicle volumes rose 7.2% over the year to take a 14% market share, while plug-in hybrids were the fastest-growing powertrain, with registrations up 35% to 11% of the market.
Despite the strong momentum, internal combustion engine vehicles remained the largest segment overall, accounting for 52% of registrations.
SMMT said manufacturers are offering a growing choice of electric vehicles, with more than 160 BEV models available by the end of 2025 and at least 60 more expected in 2026.
However, it warned that demand growth remains insufficient to meet policy ambitions, with EV uptake rising 24% during the year while mandate targets increase more quickly.
The industry body estimated that carmakers subsidised EV sales by more than GBP5 billion in 2025, equivalent to around GBP11,000 per vehicle, a level it said is unsustainable over the longer term.
SMMT Chief Executive Mike Hawes said the market's recovery to above two million registrations was a "reasonably solid result amid tough economic and geopolitical headwinds", but cautioned that policy signals risk undermining consumer confidence.
"Rising EV uptake is an undoubted positive, but the pace is still too slow and the cost to industry too high," Hawes said. "Given developments abroad, 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 at the forefront of global competition."
By Eva Castanedo, Alliance News reporter
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