The UK’s car market has returned to growth in May due to the 1.6% rise in vehicle registrations, according to the latest data published by Society of Motor Manufacturers and Traders (SMMT).

The EV production performance hit its best since May 2021; however, this was still 18.3% lower than pre-pandemic rates, and only its second month of growth in 2025.

Overall vehicle registration for private, fleet and business has grown from May 2024 where EV production was at 147,678 versus May this year where overall production was 150,070, representing the 1.6% increase.

Fleets and businesses drove the EV production growth, up 3.7% and 14.4% respectively and responsible for 62.6% of registrations, while interest from private buyers fell for the second consecutive month, down 2.3%

There were declines in deliveries of both petrol and diesel cars – down 12.5% and 15.5% – while demand for the latest electrified models increased to take a combined 47.3% market share.

Uptake of hybrid electric vehicles (HEVs) grew by 6.8% to 20,351 units, while plug-in hybrid electric vehicles (PHEVs) were up more than half (50.8%) to 17,898. 

Registrations of battery electric vehicles (BEVs), meanwhile, rose by 25.8%, accounting for 21.8% of the market as manufacturers continued to support sales with incentives.

Despite this, BEV registrations year-to-date have only reached 20.9% market share – still seven percentage points off the 28% mandated by regulation.

Moreover, discounting is still ongoing despite new model introductions and increasingly affordable offerings.

While recent adjustments to the ZEV Mandate were welcome, the current market situation is unsustainable for a sector already facing multiple cost pressures.

Halving VAT on new EV purchases would put 267,000 additional new EVs – rather than fossil fuel vehicles – on the road in the next three years and drive down CO2 emissions by six million tonnes a year.

Removing EVs from the VED Expensive Car Supplement, meanwhile, and equalising VAT paid on public charging to that levied at home would send a signal that now is the time to switch.

Mike Hawes chief executive at SMMT 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 – 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.

Reaction:

Susan Wells, director of EV and solar at Hive:

“Electric vehicle growth has been a driving force in the new car market this year, with last month’s figures demonstrating the momentum that exists as more people than ever make the switch to EVs.

“This growth is supported by nearly 80,000 public EV chargepoints now available across the UK, with almost 3,000 public charging devices added in April alone, equal to one every 15 minutes.

“The Government’s recent announcement that homeowners no longer require planning permission to install EV charge points, is another positive step to further accelerate EV adoption – a move that will enable drivers and businesses to install charging infrastructure at a faster rate.

“As the Chancellor prepares her Spending Review, it’s crucial that policy decisions and investment continues to encourage would-be EV drivers to transition away from petrol and diesel.”

Philipp Sayler von Amende, chief commercial officer at Get Your Car:

“While SMMT continues to report faltering demand among private buyers, overall new car enquiries on Carwow increased by 10% year-on-year in May, whereas used enquiries increased by 40%.

“This suggests that some consumers are shifting toward more cost-conscious choices, but there is still significant appetite for new.

“Enquiries for new and used cars in the £30,000 to £40,000 bracket were up 34%, and those between £40,000 and £50,000 weren’t far behind, with a 30% increase compared to last May.

“So, while value is still a key factor for many, the data hints that a significant proportion of drivers are open to investing a bit more.

“We’re also continuing to see serious growth in interest for EVs. Enquiries for BEVs were up 77% year-on-year in May.

“That echoes SMMT’s figures that show EV registrations are on the rise. Chinese brands, in particular, are making a big impact – JAECOO 7 was the most-configured car on Carwow last month, and BYD models like the Seal and Seal U are also proving really popular, being two of the top five most-viewed car reviews on Carwow in May.”

Jon Lawes, managing director at Novuna Vehicle Solutions:

“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.”

Nick Williams, managing director at Lex Autolease: 

“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.”

James Hosking, managing director of AA Cars: 

“The UK’s new car market delivered a solid performance in May, with registrations climbing as the industry begins to find its feet following a challenging start to the year.

“This growth suggests that buyers are slowly regaining confidence, aided by lower interest rates and attractive new car offers.

“The May uplift likely reflects a combination of pent-up demand from earlier in the year, strong fleet appetite, and the pull of the new 25-plate registration.

“These factors often combine to lift sales around this time of year, particularly for company cars and business fleets looking to take advantage of tax efficiencies.

“Private buyers remain more cautious, but the gradual improvement in borrowing conditions is helping to reduce monthly finance costs, making new models more accessible to a broader audience.

“It’s a fragile recovery, but a recovery nonetheless.

“EV sales are also inching upward, as more consumers recognise the long-term running cost savings and environmental benefits.

“That said, the EV market still faces headwinds, particularly around affordability and infrastructure.

“While manufacturer incentives and falling second-hand EV prices are helping, concerns about charging access and range anxiety continue to hold some buyers back.

“Our data shows a 10% drop in the average price of the 20 most-searched-for EVs and hybrids on the AA Cars platform in Q1 2025 compared to the previous year, which is helping to bring greener vehicles within reach of more households.

“But greater support is still needed to shift EVs from a niche choice to a mainstream one.

“Looking ahead, meeting the Government’s Zero Emission Vehicle (ZEV) mandate – requiring 28% of new cars and 16% of new vans sold in 2025 to be fully electric – will hinge not only on vehicle supply, but on building sustained consumer demand.

“Achieving this will require clear public messaging, meaningful incentives, and ongoing investment in charging infrastructure.

“Today’s figures are promising, but the path to a truly resilient new car market will rely on policy alignment, affordability, and restoring long-term buyer confidence.”

David Borland, UK & Ireland automotive leader at EY:

“May’s increase is a welcome boost in the context of challenging market conditions facing UK automotive companies, with continued global trade uncertainty adding a further layer of complexity in the global industry.

“Battery Electric Vehicle (BEV) sales have represented a consistent source of growth for the sector in recent months, which continued in May with a significant 25.8% year-on-year increase, as the shift towards cleaner and greener powertrain technologies continues.

“However, the Zero Emissions Vehicle (ZEV) Mandate is still the elephant in the room, with BEV market share for this year to date currently standing at 21.8%, which remains some way behind the 28% required for compliance.

“Conversely, Internal Combustion Engine (ICE) vehicle sales continue to fall, with petrol (-12.5%) and diesel (-15.5%) both down year-on-year in May – a trend that is expected to continue as the year progresses as a lever for meeting the ZEV mandate by reducing overall volumes.

“Sales of Plug-in Hybrid Electric Vehicles (PHEVs) are reportedly expected to increase significantly over the coming years following the recent softening of ZEV Mandate legislation.

“Indeed, PHEV sales rose once again last month with a considerable 50.8% year-on-year uptick, as they continue to represent a compelling alternative powertrain technology.”

Maria Bengtsson, UK & Ireland mobility leader at EY:

“An uncertain economic outlook for the UK could prompt consumers to delay major spending decisions according to the EY ITEM Club’s latest economic forecast, but the latest data bucks the recent trend of a slowdown for new car registrations.

“Despite this, against the ongoing challenging backdrop, the need for automakers and dealers to be both resilient and agile is as important as ever, while the right support from policymakers will be equally crucial.

“How can automakers compel consumers to make the switch to a BEV? How can businesses and the Government educate consumers on the benefits of owning a BEV? How can automakers continue to scale up innovation, variety and quality of new electric vehicles while keeping costs manageable?

“These are all critical questions for the automotive industry going forward, with the answers not yet entirely clear. Seeking out the right advice, prioritising forward planning and lobbying key policymakers will be crucial.

“While the fact that fleet sales have began to decelerate following a strong performance in 2024 is a concern, persistently declining retail sales continue to have a greater impact on profitability.

“Retail sales have shown very little sign of an upward trajectory recently – a trend which continued in May with a slender 2.3% year-on-year decline.

“This channel should be a critical priority for automakers and dealers alike.

“However, the levers they can pull to entice consumers are finite given the subdued economic outlook, a changing regulatory environment and the sentiment and uncertainty challenges associated with the electric vehicle transition, so collaboration and support from policymakers will inevitably be pivotal.”