UK van market shrinks in 2025 despite strong EV growth

The UK’s new light commercial vehicle (LCV) market contracted sharply in 2025, falling 10.3% to 315,281 registrations, according to new data released by the Society of Motor Manufacturers and Traders (SMMT).

The decline reflects a year of subdued business confidence and a challenging economic backdrop, with fleet renewal down in every month except December, which saw a modest 1.7% uptick.

Segment performance was overwhelmingly negative. Medium-sized vans posted the steepest drop at –20.7% (51,639 units), while large vans, which continue to dominate the market with a 66.7% share, fell –9.8% to 210,262 units. Pick-ups also ended the year slightly down (–0.7%, 37,308 units) despite a surge in early 2025 as operators sought to get ahead of a tax rule change that now treats double cab models as cars for benefit-in-kind and capital allowance purposes.

Only lower-volume segments bucked the trend: small vans rose 1.9% to 8,766 units, and 4x4s climbed 2.3% to 7,447.

In contrast to the wider downturn, demand for battery electric vans (BEVs) surged 36.2%, reaching a record 30,169 registrations. Manufacturers now offer more than 40 zero-emission van models – over half of all options available – helping push EV uptake higher even as the broader market shrank.

However, the growth remains well below the mandated 16% EV share for 2025, with BEVs accounting for just 9.5% of registrations. To close the gap, manufacturers collectively provided nearly £400 million in discounts last year, underscoring the strain created by regulatory targets that are outpacing real-world demand.

Insufficient public charging suited to vans, high production costs, and long delays connecting depots to the electricity grid continue to impede adoption. While government measures such as the extension of the Plug-in Van Grant, the new Depot Charging Scheme and planned reforms to ease charger installation are expected to help, the mandate jumps to 24% in 2026, prompting industry calls for urgent reassessment.

SMMT Chief Executive Mike Hawes said the figures highlight mounting challenges for both industry and operators.

“2025’s new van market reflects a tough economic environment which constrained fleet investment. While rising EV uptake is encouraging, it has come at a huge cost to industry and remains significantly adrift of ambition. Government’s upcoming review must acknowledge the unique challenges facing the light commercial vehicle sector and the additional action required, else the gap between market regulation and reality will continue to widen.”