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The UK's new-car market is currently experiencing a decline in overall registrations, with a 5% year-on-year drop in July and forecasted weaker sales compared to pre-pandemic levels. This decline in new-car sales is accompanied by a continuing reduction in Internal Combustion Engine (ICE) vehicle registrations.
Petrol and diesel vehicles are feeling the brunt of this shift, with petrol registrations down 17.3% and diesel down 15.1% year-on-year. In contrast, the electrified market is showing steady growth.
Battery Electric Vehicles (BEVs) on the Rise
Battery Electric Vehicles (BEVs) in the UK are showing a significant increase, with registrations up by 41.7% in February 2025, amounting to 21,244 deliveries. When compared to February 2019, the market saw an increase of 2.5%. Across the first two months of 2025, BEV volumes have risen 41.6%, with 50,878 registrations.
BEVs accounted for 25.3% of total registrations in February 2025, up from 17.7% recorded at the same point last year. This growth has propelled BEVs to represent 47.5% of total registrations in February 2025, up 10.2pp. Combining BEVs and Plug-in Hybrid Electric Vehicles (PHEVs), the electric vehicle (EV) market increased by 35.2% in February 2025.
Plug-in Hybrid Electric Vehicles (PHEVs) Also See Growth
The UK's plug-in hybrid (PHEV) market also had a strong month, with registrations increasing by 19.3% in February 2025. PHEVs accounted for 8.7% of overall volumes in February 2025, up 1.5pp year on year.
Factors Influencing the Shift
Several factors are contributing to this shift towards electric mobility in the UK. Economic and market conditions, government policies and incentives, infrastructure challenges, and shifts in buyer behavior are all playing a role.
- Economic and market conditions: The UK car market faces a challenging macroeconomic environment with weak consumer demand, a cautious outlook due to potential tightening fiscal policy, interest rate effects, and trade uncertainties, dampening overall new car purchases.
- Government policies and incentives: The introduction of targeted EV grants supports BEV adoption, aligned with industrial strategies aiming for greener vehicles.
- Infrastructure challenges: Limitations in the UK’s EV charging network and higher upfront costs for many BEVs still encourage some consumers to choose petrol and diesel vehicles, though this is shrinking over time.
- Shifts in buyer behavior: While private and fleet demand declined, business sector registrations slightly increased, and growth was concentrated in certain segments like dual-purpose and luxury saloons.
In conclusion, the UK is undergoing a transition away from ICE vehicles towards electric mobility, driven by regulatory pressure, incentives, and changing consumer preferences. However, this shift is moderated by economic headwinds and infrastructure limitations. The BEV market is expanding, yet it has not fully reached government targets, while ICE sales continue their steady decline in 2025.
Technology and lifestyle are intertwining in the UK's automotive sector, as Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) are showing significant growth, with electric vehicles (EVs) accounting for 35.2% of total registrations in February 2025. This surge in EV adoption can be attributed to various factors such as government policies and incentives, shifting consumer behavior, and improvements in technology that make electric cars more appealing. In contrast, registrations for petrol and diesel vehicles are experiencing a decline, reflecting a changing preference towards green and sustainable lifestyle choices.
