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The UK’s motoring industry has expressed serious concerns over the sustainability of government incentives for electric vehicles (EVs), despite a notable increase in new car registrations. In 2025, the total number of new cars registered surpassed two million for the first time since the pandemic, with nearly half a million of these vehicles being electric, according to data from the Society of Motor Manufacturers and Traders (SMMT). Mike Hawes, the SMMT’s chief executive, described the sales figures as a “reasonably solid result amid tough economic and geopolitical headwinds,” but pointed out that electric vehicle sales are still not progressing quickly enough to meet official government targets.
Last year saw 2,020,373 new cars registered across the UK, marking the third consecutive year of growth and the highest level recorded since the pandemic. However, this figure remains below the 2.3 million registrations seen in 2019. Electric vehicles comprised 473,340 of the new registrations, accounting for 23.4% of the market share—a significant rise compared to the previous year but still falling short of the government’s target of 28% established under the Zero Emission Vehicles Mandate (ZEV Mandate). Under this mandate, car manufacturers risk penalties if their electric vehicle sales do not reach specified proportions of their overall sales. Nonetheless, manufacturers have some leeway, such as lowering emissions in other parts of their vehicle fleets or purchasing surplus emissions credits from peers who exceed their targets. These flexibilities were recently extended, accompanied by a reduction in potential fines following lobbying efforts from some manufacturers.
Despite these concessions, Hawes highlighted the heavy reliance on steep discounts to boost electric vehicle sales, estimating that these discounts amounted to over £5 billion last year—equivalent to approximately £11,000 per EV sold. He warned that such discounting is not sustainable, particularly as new targets for this year require an even tougher 33% share of electric cars. Hawes urged the government to bring forward a scheduled review of the ZEV Mandate, originally planned for 2027, to reflect changes in economic conditions such as rising energy prices and higher raw material costs. While emphasizing that the industry remains committed to increasing sales of battery electric vehicles, he cautioned that market demand must be better aligned with policy ambitions.
Others have taken a more optimistic view of the current policy framework. Colin Walker from the environmental research group Energy and Climate Intelligence Unit praised the latest registration figures, pointing out that one in four cars sold in 2025 were electric. He highlighted that the ZEV Mandate would likely strengthen the UK’s second-hand electric vehicle market, potentially easing financial pressures on consumers. The government has introduced several measures to promote EV adoption, including a £1.3 billion Electric Car Grant Scheme offering up to £3,750 toward the purchase of an electric vehicle, coupled with significant investments in charging infrastructure. However, the government’s autumn budget also proposed a ‘per mile’ tax on EVs to help offset losses in fuel duty revenue, a move projected by the Office for Budget Responsibility to reduce electric vehicle sales by 440,000 over five years. Hawes commented that such mixed signals can undermine the momentum needed for this technological transition, stressing the importance of consistent and supportive messaging for the EV market’s growth
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