UK van market slumps in January as EV targets loom large

The UK’s new light commercial vehicle (LCV) market suffered its weakest January start in more than a decade as registrations fell sharply amid tough economic conditions and mounting pressure to accelerate the shift to electric vehicles.

New LCV registrations declined by 7.8% in January 2026 to 17,562 units, according to figures published by the Society of Motor Manufacturers and Traders (SMMT). It marks the weakest January performance since 2012, reflecting subdued business confidence and constrained fleet investment.

The downturn was driven primarily by a collapse in demand for pickup trucks, with registrations plunging 57.0% to 1,206 units. The fall follows recent government fiscal changes reclassifying double-cab pickups as cars for benefit-in-kind and capital allowance purposes – a move the industry warned would significantly increase costs for buyers.

Medium van registrations also dropped sharply, down 27.4% to 2,547 units, while the small van segment fell 39.8% to just 402 vehicles. Only large vans and 4x4s bucked the trend, posting growth of 10.0% to 12,696 units and 33.9% to 711 units respectively.

Against this backdrop, electric van uptake continued to grow but remains well short of regulatory ambition. Battery electric van registrations rose by 26.0% to 1,844 units in January, taking a 10.4% share of the market. However, this remains far below the mandated 24% market share target for 2026, meaning demand would need to more than double within a year to stay on track.

The challenge is compounded by a weakening overall market. The latest industry outlook for 2026 has been revised down to 321,000 new LCV registrations, a modest 1.9% increase on 2025 but a notable downgrade from the 335,000 units forecast in October. While battery electric van volumes are still expected to grow by more than 50% this year, their projected market share has been cut to 13.1%, down from the previously expected 14.0%.

Industry leaders say that, without further government intervention, the pace of electrification will struggle to match regulatory expectations. Although the extension of the Plug-in Van Grant to 2027 has been welcomed, uncertainty over support beyond April this year continues to weigh on investment decisions. New initiatives such as the Depot Charging Scheme and proposed planning reforms for private charger installations are expected to help, but significant barriers remain, including high energy costs, limited van-suitable public charging infrastructure and lengthy delays in securing grid connections for depots.

“January’s decline in new van uptake reflects ongoing economic and fiscal conditions which are limiting demand, particularly for pickups, as industry had warned,” he said. “Rising EV uptake is encouraging but delivering the UK’s world-leading ambition is coming at huge cost to industry amid overall market contraction. With an even steeper 2026 target that is further still from real-world demand, government’s review of the transition must come urgently, recognising additional action is needed to deliver on ambition.”