Britain’s electric vehicle campaign suffered a major setback in 2025, with sales missing the Labour government’s key target by a wide margin, while manufacturers spent billions of dollars in rebates to shift stocks. According to preliminary data from the Society of Motor Manufacturers and Traders (SMMT), battery electric vehicles (BEVs) captured only 23.4% of the market with 473,340 registrations, well below the headline 28% zero emissions vehicle (ZEV) mandate for the year.
Total new car registrations reached 2,020,373, up 3.5% from 2024 and exceeding two million for the first time since the pandemic, but industry leaders warned the EV shortage came at an unaffordable cost. Decarbonisation Minister Keir Mather insisted the £7.5 billion government investment was “boosting EVs” and vowed to maintain momentum through grants and more public chargers.
However, SMMT chief executive Mike Hawes said, “Amid tough economic and geopolitical constraints, the new car market has finally reached two million registrations for the first time this decade, which is quite a solid result.”
Growing EV consumption is undoubtedly positive.
Mr Hawes said, “Growing EV consumption is undoubtedly positive, but the pace is still too slow and the costs to the industry too high.”
He revealed that manufacturers offered rebates of £5.5 billion—the equivalent of more than £11,000 per EV sold—describing it as “unsustainable.”
Mr Hawes said, “This is increasing the number of battery electric vehicles being sold. The question is, at what price?”
They called on the government to bring forward a planned 2027 review of the ZEV mandate, highlighting “mixed messages” such as the November Budget announcement of a future pay-per-mile tax for EVs as well as the re-introduction of electric car grants of up to £3,750.
Mr Hawes warned, “Even announcing a tax specifically on EVs would send a very contradictory message to consumers.”
Eurig Drus, managing director of the UK group of Stellantis (owner of Vauxhall, Peugeot and Citroën), told the BBC that the UK is “continuing to lose its position in Europe and the rest of the world”.
Mr Druce urged an early review this year to give manufacturers “certainty” for investment decisions. The mandate allows flexibilities, including credits for the sale of low-emission petrol/diesel, thereby reducing the effective requirement by an estimated 20.4%, which the industry met and avoided widespread fines.
Petrol’s share fell from 52.2% to 46.4%, and diesel’s share fell from 6.3% to 5.1%, while non-plug-in hybrids increased slightly to 13.9%. Chinese brands experienced significant growth, capturing 9.7% of the market with 196,000 vehicles.
The top sellers overall were the Ford Puma and Kia Sportage, with Tesla’s Model Y the leading BEV.
Colin Walker of the Energy and Climate Intelligence Unit called 2025 “another bumper year for EV sales”, predicting profits for the second-hand market.
Tanya Sinclair, chief executive of Electric Vehicles UK, said EVs offer “strong value for money” and “best-in-class performance” but called for “clearer, more consistent policy signals”.
Ginny Buckley, chief executive of Electrifying.com, said, “Education will unlock the next wave of EV buyers, not uncertainty.” With the 2026 target rising to 33%, Labour comes under increasing pressure to resolve conflicting policies or risk blocking a 2030 ban on new petrol/diesel sales.
