The UK new car market returned to growth in May, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT), driven by a strong uplift in electric vehicle (EV) registrations.
May 2025 saw the best May performance for new car registrations since 2021, although sales continue to lag behind their pre-pandemic levels.
Despite the return to growth, May remains only the second month of this calendar year to saw car sales up on 2024, highlighting global economic turbulence as well as an uncertain picture for consumer finances. Fleets and businesses drove the growth, up 3.7% and 14.4% respectively and responsible for 62.6% of registrations. Interest from private buyers, however, fell for the second consecutive month.
There were double digit declines in deliveries of both petrol and diesel cars – down -12.5% and -15.5%; meanwhile, demand for the latest electrified models increased dramatically to take a combined 47.3% market share. Despite this, battery EV registrations year-to-date have only reached 20.9% market share, seven points behind the mandated 28% government target.
Significant discounting of EVs is still ongoing despite new model introductions and increasingly affordable offerings. While recent adjustments to the ZEV Mandate were welcome, the SMMT believes the current market situation is unsustainable for a sector already facing multiple cost pressures.
Mike Hawes, SMMT Chief Executive, commented:
“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 – investments which are integral to the decarbonisation of all road transport. 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.“
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