The UK new car market has broken the two-million-registration barrier for the first time since the pandemic, but beneath the headline growth lies a widening disconnect between government ambition, consumer demand and industry reality.
According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), 2,020,520 new cars were registered in 2025, marking the third consecutive year of growth and a 3.5% increase year on year.
December delivered a strong finish, with registrations up 3.9% to 146,249 units. Private buyers returned in force at the end of the year, rising 16.0% compared with December 2024, while battery electric vehicles (BEVs) took an unusually high 32.2% share of the monthly market, the only point in 2025 where the Zero Emission Vehicle (ZEV) mandate target of 28% was exceeded.
Fleet continues to dominate
Despite a modest recovery, private buyers remain a minority force in the market. Private registrations rose 4.5% to 779,587 units but accounted for just 38.6% of total sales, well below pre-pandemic norms.
Fleet and business registrations continued to dominate, rising 2.6% to 1.19 million units and 8.8% to 46,388 units respectively.
This trend has significant implications for the independent aftermarket, as fleet vehicles typically enter workshops later in life but often with more complex powertrains and technology.
Electrification accelerates but misses the mandate
Electrified vehicles narrowly failed to become the majority of new car registrations in 2025, despite a surge in the final quarter.
Hybrid electric vehicles (HEVs) grew 7.2% to claim a 13.9% market share, while plug-in hybrids (PHEVs) were the fastest-growing powertrain, up 34.7% to 11.1%. BEVs reached 473,348 registrations, giving them a 23.4% share of the annual market.
That BEV volume alone exceeded the combined total of 2021 and 2022 and is likely to position the UK as Europe’s second-largest EV market by volume.
However, it still falls well short of the 28% ZEV mandate target and the gap is growing rather than shrinking.
For independent garages, this confirms a long-term reality: EVs are coming in volume, but ICE and hybrid vehicles will remain the backbone of workshop work for years yet.
Unsustainable pressure on manufacturers
While consumer choice continues to expand, with over 160 BEV models now available and at least 60 more due in 2026, uptake has risen by just 23.9%.
A reintroduced EV purchase grant has helped stimulate demand, but only around a quarter of models qualify for support.
As a result, manufacturers are carrying the financial burden.
SMMT estimates that car makers subsidised EV sales by more than £5 billion in 2025, equivalent to around £11,000 per BEV. The industry has warned that this level of support is unsustainable.
Compounding the issue, the announcement of a new electric vehicle excise duty (eVED) for EVs purchased from 2028 risks undermining consumer confidence, particularly when combined with additional local charges for EV drivers and ongoing public charging frustrations.
CO₂ falls, but targets tighten further
Average new car CO₂ emissions fell by 10.1% in 2025 to 91.8 g/km, helping some manufacturers move closer to compliance.
However, pressure is set to intensify sharply: from next year, BEVs must account for one in every three new car registrations under the ZEV mandate.
The UK’s transition timeline is now the most aggressive of any major automotive market.
With the EU proposing to revise its own 2035 ICE phase-out deadline, divergence between the UK and its largest neighbouring market is increasing, raising concerns over long-term investment and vehicle supply.
Mike Hawes, SMMT Chief Executive, said the two-million milestone was “a reasonably solid result amid tough economic and geopolitical headwinds” but warned that current policy signals risk stalling progress.
“Rising EV uptake is an undoubted positive, but the pace is still too slow and the cost to industry too high,” he 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.”
The forthcoming review of the ZEV mandate is now seen as critical, not just for manufacturers, but for the entire aftermarket ecosystem that depends on a stable, investable vehicle parc.
Why it Matters
For workshops, the data reinforces several key realities:
– EV volumes are rising, but not evenly. Expect continued regional and fleet-driven concentration.
– Hybrids and PHEVs are growing fast, bringing complexity and new service challenges.
– ICE vehicles are not disappearing and will remain a major revenue source well into the 2030s.
– Skills, tooling and information access will be decisive in determining which garages thrive.
Does this data reflect what you’re seeing on the workshop floor? Tell us your experience in the comments.
