EV market share continues to grow as new car registrations recover

Electric cars’ share of the new car market grew again last month but is still falling short of government-mandated targets.

The latest data from the Society of Motor Manufacturers and Traders (SMMT) showed that EVs accounted for 21.8% of new car registrations in May 2025, up from 20.4% in April, as electric models continued their upward trajectory and outperformed petrol and diesel.

The overall new car market recovered slightly in May, growing 1.6% after several months of decline. This was propped up by electric and hybrid sales as traditional fuels continued to fall. EV registrations were up 25.8% year-on-year in May, while plug-in hybrids were up 51% and series hybrids grew almost 7%. Petrol was down 12.5% while diesel dropped 15.5%.

Petrol remains the biggest single fuel type, at 47.5%, but with EVs now at nearly 22% they are the second biggest segment by quite some margin. However, May’s market share figure is still some way short of the 28% that the industry must meet by the end of the year under the ZEV Mandate.

The SMMT warned that while a growing number of affordable EVs was helping the market, “unsustainable” discounting by car makers was also contributing to EVs’ continued growth, and the growth was still being driven by fleet rather than private buyers.

Mike Hawes, SMMT chief executive, said: “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.

“Next week’s Spending Review is the opportunity for government to double down on its commitments to Net Zero by driving demand through fiscal measures that boost the market and shore up our competitiveness.”

He urged the government to consider halving VAT on new EVs, which the SMMT estimates would boost demand by 267,000 vehicles in the next three years. He also called for VAT on public charging to be equalised with domestic rates, and for EVs to be exempted from the Expensive Car Supplement.

Industry observers said the latest figures were more positive news for the EV sector but echoed calls for the Government to do more to incentivise drivers to switch.

Jon Lawes, managing director at Novuna Vehicle Solutions, one of the UK’s largest fleet operators said: “It’s encouraging to see EV registrations rebounding after a tough stretch for UK carmakers, with production at historic lows and tariff uncertainty still looming.

“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.

“But let’s be clear – EV uptake is still being propped up by the industry. If government is serious about mass adoption, it needs to go further. Raising the VED threshold would be a smart, targeted step – right now, too many EVs are penalised by the luxury tax, and that’s slowing progress.”

While much focus is put on new registrations, Nick Williams, managing director at  Lex Autolease, added that the second-hand market was where many drivers would choose to make the switch. He noted: “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.

“With commitment and support from dealers, we can charge up the used market and help more drivers make the switch.”