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New car sales hit fresh highs
2025 was the best year for car sales since the pandemic but manufacturers are still struggling to meet EV targets
Words by: Erin Baker
Published on 6 January 2026 | 0 min read
New car registrations topped two million for the first time since 2019, The Society of Motor Manufacturers and Traders (SMMT) announced yesterday. There was good news for electric-car sales too, with almost one in four (22.4 per cent, to be exact) cars sold in 2025 being pure electric, and more than 160 electric models now on sale in the UK. Sales of plug-in hybrids were especially strong and rose by a huge 34.7 per cent, to 11 per cent of the market. Petrol cars fell eight per cent, and diesel fell by 15.6 per cent, meanwhile.
However, the cost of accelerating EV adoption was borne by car brands, with an average discount of £11,000 applied to new electric car prices, which totalled £5.5bn of discounts across the year. The £11,000 discount is not a random figure, given the Government penalty imposed on brands who failed to meet the requirement for at least 28 per cent of their sales being pure electric was … £12,000 per car beyond that threshold. This year, that Government target – the Zero Emissions Vehicle, or ZEV, mandate ), rises to 33 per cent. The SMMT calculates meeting that target means electric vehicle sales need to increase by a hefty 42 per cent.
However, the cost of accelerating EV adoption was borne by car brands, with an average discount of £11,000 applied to new electric car prices, which totalled £5.5bn of discounts across the year. The £11,000 discount is not a random figure, given the Government penalty imposed on brands who failed to meet the requirement for at least 28 per cent of their sales being pure electric was … £12,000 per car beyond that threshold. This year, that Government target – the Zero Emissions Vehicle, or ZEV, mandate ), rises to 33 per cent. The SMMT calculates meeting that target means electric vehicle sales need to increase by a hefty 42 per cent.
More startling stats come with news that Chinese brands like BYD, Omoda, Jaecoo, Xpeng and Chery accounted for a startling 9.7 per cent of the market, which marks an unrivalled pace of growth for new brands arriving in the UK. Sales of cars built in China by international brands such as Tesla, Volvo and Polestar meanwhile rose by 54 per cent to make up 13.5 per cent of the market.
The UK’s zero-emissions targets are under pressure from Europe, which relaxed the 2035 deadline on the sale of new petrol and diesel cars at the end of 2025. As it stands the Government has held to its commitment to ban sales of new pure petrol and diesel cars from 2030 , though hybrids will still be allowed, which could include mild-hybrid as well as plug-in models. Average CO2 emissions produced by cars sold in the UK decreased by 10g/km last year, and the UK remains the world’s leading zero-emissions bus market.
The UK’s zero-emissions targets are under pressure from Europe, which relaxed the 2035 deadline on the sale of new petrol and diesel cars at the end of 2025. As it stands the Government has held to its commitment to ban sales of new pure petrol and diesel cars from 2030 , though hybrids will still be allowed, which could include mild-hybrid as well as plug-in models. Average CO2 emissions produced by cars sold in the UK decreased by 10g/km last year, and the UK remains the world’s leading zero-emissions bus market.
February should reveal what impact the Government’s announcement of a pay-per-mile tax on electric cars from April 2028 has had on sales of electric cars. The Office for Budget Responsibility estimated that the tax, announced in the Budget, could mean 120,000 fewer electric cars on our roads. While that adds up to a degree of uncertainty one thing is clear – 2026 promises to be a fascinating year for those building, selling and buying cars alike!
