UK van market falls 3.4% as EV demand falters

The UK’s light commercial vehicle (LCV) market suffered a setback in March, as falling pickup demand and weakening electric vehicle uptake dragged overall registrations into decline.

According to new figures from Society of Motor Manufacturers and Traders (SMMT), total registrations dropped by 3.4% to 49,505 units during the key new plate month, traditionally the busiest period of the year. The result marks the weakest March performance since 2023 and reflects ongoing economic uncertainty and subdued business confidence.

The downturn was largely driven by a dramatic collapse in pickup demand. Registrations of new pickups fell by 54.0% to just 3,732 units, offsetting growth in other segments. Over the first quarter, pickup volumes are down 54.8%, representing nearly 7,000 fewer units compared with the same period last year.

Industry experts point to tax policy changes introduced last April as a major factor behind the slump. The reclassification of double cab pickups as cars for Benefit in Kind (BIK) and capital allowance purposes has significantly increased costs for businesses, particularly in sectors such as construction and agriculture, where pickups are widely used. The SMMT has urged the government to reverse the measure, warning it is discouraging fleet renewal and prolonging the use of older, more polluting vehicles.

Elsewhere in the market, performance was mixed. Large vans – the biggest segment – grew by 8.7% to 34,805 units, while medium vans rose 2.3% to 8,365 units. Registrations of 4x4s also surged by 41.3% to 1,871 units. However, small vans saw a sharp decline of 53.8%, though this follows an unusually strong performance in March last year.

Concerns are also mounting over the pace of electrification in the sector. Battery electric van (BEV) uptake fell by 15.9% in March, with just 3,543 units registered. Market share dropped to 7.1%, its lowest level since September 2024, highlighting the growing gap between demand and government targets.

Despite a modest 4.3% increase in BEV registrations over the first quarter, electric vans account for only 9.0% of the market, well short of the 24% share mandated for 2026. Diesel vehicles continue to dominate, making up 85.6% of all new LCV registrations.

The SMMT warns that while manufacturers now offer around 40 zero-emission van models, adoption remains constrained by high upfront costs, limited charging infrastructure, and operational challenges for fleets. Recent government measures, including extending the Plug-in Van Grant to 2027 and introducing a Depot Charging Scheme, are seen as positive steps, but insufficient to close the gap.

Commenting on the figures, SMMT Chief Executive Mike Hawes said the results were “deeply concerning.”

“A weak March is deeply concerning given this number plate change month often sets the tone for the year,” he said. “With fleet renewal contracting in 14 of the past 16 months, it reflects poorly on overall business confidence.

“A thriving market is essential not just to economic growth but to decarbonisation. It is increasingly alarming to see BEV demand waning when it must accelerate to meet ever-tougher mandated levels. With the transition already falling behind schedule, a holistic review is urgently needed.”