The Society of Motor Manufacturers and Traders (SMMT) reported that electric vehicles captured 21.8% of new car registrations in May 2025, according to latest data released by the trade organization. This represents an increase from 20.4% in April as EVs continued outpacing petrol and diesel sales.
The overall new car market grew 1.6% in May after several months of decline. Electric and hybrid sales drove this recovery while traditional fuel registrations fell.
EV registrations jumped 25.8% year-on-year in May.
Plug-in hybrids surged 51% while series hybrids grew almost 7%. Petrol registrations dropped 12.5% and diesel fell 15.5%.
Petrol remains the largest single fuel type at 47.5% of the market. EVs now hold nearly 22% – making them the second biggest segment. However, May’s market share still falls short of the 28% target required under the ZEV Mandate by year’s end.
Discounting Drives Growth
The SMMT warned that while more affordable EV models help the market, manufacturers’ discounting strategies can’t continue indefinitely. Fleet buyers rather than private consumers continue driving EV growth.
Mike Hawes, SMMT chief executive, said the market recovery was welcome but raised sustainability concerns.
“A return to growth for new car registrations in May is welcome but manufacturer discounting on new products continues to underpin the market, notably for electric vehicles. This cannot be sustained indefinitely as it undermines the ability of companies to invest in new product development.”
Hawes urged the government to use next week’s Spending Review to support Net Zero commitments through demand-driving fiscal measures.
VAT Reduction Proposals
The SMMT estimates that halving VAT on new EVs would boost demand by 267,000 vehicles over three years. The organization also called for equalizing VAT on public charging with domestic rates and exempting EVs from the Expensive Car Supplement.
Industry observers echoed calls for stronger government incentives to encourage driver adoption.
Jon Lawes, managing director at Novuna Vehicle Solutions, one of the UK’s largest fleet operators, welcomed the registration rebound after challenging periods for UK carmakers.
“The decision to scrap planning permission for EV chargers is a smart move – especially for businesses – and should help accelerate rollout by removing a key barrier to adoption.”
Lawes emphasized that current EV uptake relies heavily on industry support. He noted that raising the VED threshold would target the luxury tax penalty affecting many EVs.
Second-Hand Market Momentum
Nick Williams, managing director at Lex Autolease, highlighted the second-hand market’s growing importance for EV adoption.
“Rising EV registrations reflect growing consumer confidence – but it’s the used market that’s really powering up. With a broader range of models now available second-hand, drivers have more choice at affordable prices, making the switch to electric easier and more accessible than ever.”
Williams noted that dealer commitment and support could accelerate used market growth and help more drivers transition to electric vehicles.
The latest figures show progress toward electrification targets but highlight the ongoing challenge of achieving mandated market share levels without sustainable long-term the pricing strategies.
