New UK car market starts 2026 with growth

The UK new car market made a positive start to 2026, with registrations rising 3.4% in January to 144,127 units, according to figures from the Society of Motor Manufacturers and Traders (SMMT). The result marks the strongest January performance since pre-pandemic 2020.

Growth was recorded across all buyer groups. Private registrations increased by 4.5%, fleet registrations rose 1.6%, and the smaller business segment posted a 46.5% increase. Fleets continued to dominate the market, accounting for more than three-fifths (61.2%) of all new cars registered during the month.

Despite overall market growth, battery electric vehicle (BEV) market share fell back compared with last year. BEV volumes edged up just 0.1% to 29,654 units, but their share of the market slipped to 20.6% – the lowest since April 2025. The softer performance follows an unusually strong January in 2025, when demand was pulled forward ahead of changes to BEV taxation, as well as a late-2025 surge driven by manufacturers seeking to meet regulatory targets.

Plug-in hybrid vehicles (PHEVs) delivered the strongest growth among electrified powertrains, rising 47.3% to capture 12.9% of the market. Hybrid electric vehicles also recorded growth, up 4.8% year on year to represent 13.4% of registrations.

While January is typically a lower-volume month and not always indicative of full-year trends, the latest outlook points to modest growth for the overall market in 2026. New car registrations are forecast to rise 1.4% to 2.048 million units, an improvement on projections made late last year.

Prospects for electric vehicle uptake have also been revised upwards, supported by wider model availability, improving driving range and the reintroduction of the Electric Car Grant. BEVs are now expected to account for 28.5% of new car registrations in 2026. However, this remains well short of the 33% mandated target, raising concerns over the pace of the transition.

The SMMT said the gap between policy ambition and market reality persists despite significant manufacturer investment and continued improvements to the charging network. It warned that further demand pressures could emerge with the planned introduction of electric vehicle excise duty from 2028, adding to calls for a comprehensive review of the UK’s transition framework.

Mike Hawes, chief executive of the SMMT, said: “Britain’s new car market is building back momentum after a challenging start to the decade.

“It is also decarbonising more rapidly than ever and, despite a January dip in EV market share, the signs point to growth by the end of the year. The pace of the transition, however, may be slowing and is certainly behind mandated targets. With sales of new pure petrol and diesel cars planned to end in less than four years, there needs to be a comprehensive review of the transition now, to ensure ambition can match reality.”