UK new car market hits 22-year February high

The UK’s new car market recorded its strongest February performance in more than two decades, with registrations rising 7.2% year-on-year to reach 90,100 vehicles. The figures, released by the Society of Motor Manufacturers and Traders (SMMT), mark the busiest February since 2004 – an encouraging sign of recovery in a sector that has faced persistent supply and economic challenges in recent years.

Despite the growth, February remains a relatively low-volume and volatile month in the automotive calendar, as many buyers traditionally delay purchases until March’s new numberplate release. Even so, the latest figures suggest renewed consumer confidence, particularly among private buyers.

The increase in registrations was largely fuelled by a rebound in private retail demand, which surged 17.6% to 35,227 units. Fleet registrations – still the dominant force in the market – rose modestly by 1.8%, accounting for 59.4% of total sales. Meanwhile, the smaller business segment declined sharply by 12.7%.

Battery electric vehicles (BEVs) continued to grow in volume, with registrations up 2.8% to 21,840 units. However, their market share slipped to 24.2%, marking the second consecutive month of year-on-year decline in share.

This slowdown reflects a combination of factors. Early 2025 saw a surge in EV purchases as buyers rushed to avoid new tax changes introduced in April. Additionally, manufacturers pushed hard at the end of last year to meet Zero Emission Vehicle (ZEV) mandate targets, pulling forward some demand.

Lower overall February volumes may also exaggerate fluctuations in market share, but the trend raises concerns as the UK pushes toward ambitious electrification goals.

While BEVs showed modest growth, plug-in hybrids emerged as the fastest-growing segment, with registrations jumping 43.5% to capture 11.6% of the market. Conventional hybrids also performed well, rising 3.3% to a 13.1% share.

Petrol cars saw a 5.2% increase in volume but lost market share, now accounting for 46.5% of registrations. Diesel continued its long-term decline, dropping 3.8% to just 4.5% of the market.

Year-to-date, BEVs hold a 22.0% market share – well short of the 33% target mandated for 2026. With March typically the most important month for car sales, industry leaders are watching closely to see whether EV adoption can accelerate.

Manufacturers have already invested heavily in electrification, offering new models and significant discounts to stimulate demand. Government support, including the Electric Car Grant, has provided some assistance, but uncertainty remains.

Concerns are also growing over future policy changes, including proposals for a pay-per-mile tax on EVs from 2028, which could further dampen consumer confidence.

“The UK’s new car market is continuing to recover and EV volumes are growing too, even if market share remains disappointing,” he said. “All eyes are now on ‘new plate’ March, which typically sets the tone for the year. With the end of new petrol and diesel car sales less than four years away, EV uptake must accelerate rapidly.”

He added that while manufacturers have committed “monumental investment” to electrification, the current pace of demand may not be sustainable without policy adjustments.