Last year’s new cars registration in Britain passed two million for the first time since the pandemic.
But the Society of Motor Manufacturers and Traders said it was only due to makers’ incentives estimated at £11,000 per electric vehicle which is an unsustainable figure and they want more Government support and buyers’ encouragement.
One in four of the registrations were electric, according to figures from the SMMT out today.
SMMT chief executive, Mike Hawes, said it was a “reasonably solid result amid tough economic and geopolitical headwinds”.
Electric car sales were still not increasing fast enough to meet official targets, he said, warning of a growing gap between consumer demand and the government’s ambitions.
In total, 2,020,373 new cars were registered in 2025, the third successive year of growth and the highest total since the pandemic but short of the 2.3 million sold in 2019.
Electric cars accounted for 473,340 new registrations last year, giving them a market share of 23.4%, a significant increase on 2024, but below the government’s target of 28%, under what is known as the Zero Emission Vehicles Mandate and this is due to rise to 33% this year, putting further strain on manufacturers.
The mandate stipulates that carmakers which fail to sell enough electric cars, as a percentage of their overall sales, can face heavy fines although there are concessions built into the rules which can enable them to avoid penalties, for example by reducing emissions from other vehicles in their fleets, or by buying surplus ’emissions credits’ from manufacturers which exceed their own targets.
These ‘flexibilities’ were extended in April, following heavy lobbying by some manufacturers, while the fines for failing to comply were reduced.
Car registrations in Wales last year dipped 2.98% to 65,377 new models.
However, in Europe there has been an easing of the targets to accommodate manufacturers who have seen demand continue for petrol cars and some diesels. The UK is currently alone in pushing the ZEV mandate as hard as it is.
Hawes called on the government to bring forward a planned review of the ZEV Mandate, due to be carried out in 2027.
The Government has also said it wants to recoup last revenue from fuel sales following the growth of evs with a pence-per-mile tax on the electric models and is consulting on the best way to introduce this levy and if it will include older evs. This is also deterring potential new ev buyers.
According to the independent Office for Budget Responsibility, incentives could generate about 320,000 extra EV sales over a five-year period but it says the new tax is likely to counteract that by cutting sales by about 440,000 – leading to an overall reduction of 120,000.
The future of motoring looks increasingly costly to drivers.
The cost of fuel (net -46%) tops a list of factors motorists believe will get worse in the New Year, according to new research.
January’s Startline Used Car Tracker shows they also expect to experience more on-road insurance scams (-42%), worse behaviour from other motorists (-38%) and growing traffic congestion (-36%).
Other anticipated issues include higher car running costs (-32%), more difficult parking (-30%), and an increase in speeding and other fines (-22%).
In only one area – electric car charger availability (+56%) – are motorists expecting a net improvement.
Paul Burgess, CEO at Startline Motor Finance, said, “It looks as though most motorists are quite downbeat about almost everything connected to owning and driving a car as we head into 2026. They believe costs will rise, driving will become increasingly frustrating, and even that they are more likely to be targeted by criminals.
“Except for quite visible investments being made in electric car charging infrastructure across the country, they don’t see any bright spots at all.”
The RAC pointed out that In December the cost of fuel fell by around 2p a litre but there’s still room for improvement.
Last month the cost of wholesale fuel reached its lowest monthly average price in five years, although this was not reflected at the pumps – with petrol 3.37p higher and diesel 6.27p higher than the lowest prices in 2025.
Retailers have countered this by saying they have to cope with rising costs to keep filling stations open.
