November new car market struggles ahead of Budget drag on demand

The UK new car market weakened in November, with registrations falling -1.6% to 151,154 units as uncertainty ahead of the Budget and new tax proposals weighed on demand, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT).

The modest decline marked the sixth monthly fall of 2025, driven primarily by a -5.5% drop in private registrations. Fleet demand held largely steady, up 0.2%, while business registrations – though a small segment of the market – rose 18.0%.

Electrified vehicles secured their third consecutive month with more than 50% market share, reaching 51.4% overall. Battery electric vehicles (BEVs) accounted for 26.4% of the market, slightly ahead of last November’s 25.1%.

However, BEV volumes grew by just 3.6%, the slowest increase in nearly two years, despite continued support from the Electric Car Grant. Plug-in hybrids recorded the strongest growth, up 14.8% to 11.9% of the market, while hybrid electric vehicles edged up 1.3% to take 13.1%.

Despite record BEV volumes – 426,209 registered in the first 11 months – their 22.7% year-to-date share remains well below the government’s 28% ZEV mandate for 2025.

While the recent Budget included additional support for electrification – such as expanded funding for the Electric Car Grant, a higher threshold for the VED Expensive Car Supplement and more investment in charging infrastructure – the proposed “pence per mile” electric Vehicle Excise Duty (eVED) has raised significant industry concerns.

The SMMT said the measure risks undermining already fragile EV demand, arriving at a time when uptake needs to rise sharply to meet government targets.

“Even in a fragile market, zero emission vehicle uptake continues to rise, which is exactly what we need,” said Mike Hawes, SMMT Chief Executive.

“But the weakest growth for almost two years – ahead of government announcing a new tax on EVs – should be seen as a wake-up call that sustained increase in demand for EVs cannot be taken for granted. We should be taking every opportunity to encourage drivers to make the switch, not punishing them for doing so, else the ambitions of government and industry will be thwarted.”

Retail experts also warned that the final month of the year will be crucial.

Ian Plummer, Commercial Director at Auto Trader, said: “November saw a respectable month for new car sales, but now we need a strong December to push us over the 2m mark for the year.

“Our forecasts predict the new and used car markets combined will return to pre-pandemic levels next year, despite the mixed signals in the Budget on electric vehicles – more Electric Car Grants but a pay-per-mile tax to come in 2028. In our view, it’s just too soon to be eating into the cheaper running costs that electric vehicles enjoy over petrol and diesel models.”

With traditional petrol and diesel cars now representing less than half of registrations for the third month running, the UK’s shift toward electrification continues. But November’s subdued BEV growth highlights the sensitivity of the market to policy signals at a pivotal moment.

Manufacturers and retailers alike are urging the government to reconsider the eVED proposal, warning that introducing additional running costs prematurely could stall momentum just as the sector prepares for even tougher 2026 requirements.