Sales of new cars grew by about 3.5% last year amid a surge in demand for electric vehicles (EVs), new figures show.
Lobby group the Society of Motor Manufacturers and Traders (SMMT) said 2.02 million new cars were registered in 2025.
That is compared with the total of 1.95 million during the previous 12 months, and represented the third consecutive year of growth.
Registrations of pure battery EVs were up 23.9% year-on-year to 473,340.
This was a market share of 23.4%, up from 19.6% in 2024.
The volume is expected to place the UK as the second largest EV market in Europe, behind Germany.
The Government’s zero-emission vehicle (Zev) mandate set a headline target for at least 28% of cars sold by each manufacturer in the UK last year to be zero-emission, which generally means pure battery electric.
But the Energy and Climate Intelligence Unit think tank has estimated the actual sales requirement to avoid penalties was just 20.4%, as companies also get credits for selling large numbers of lower emission petrol and diesel cars.
SMMT chief executive Mike Hawes said: “The new car market finally reaching two million registrations for the first time this decade is a reasonably solid result amid tough economic and geopolitical headwinds.
“Rising EV uptake is an undoubted positive, but the pace is still too slow and the cost to industry too high.”
Mr Hawes said manufacturers discounted new EVs by a total of £5.5 billion in the UK last year, which is equivalent to an average of more than £11,000 per car sold.
He described this as “unsustainable”.
Mr Hawes warned about the impact of the UK’s “mixed messaging” about EVs.
He contrasted the introduction of the electric car grant, which provides discounts of up to £3,750 on the purchase of new EVs, with the announcement of a new pay-per-mile tax for EVs announced in November’s Budget.
Mr Hawes urged the Government to bring forward a review of the Zev mandate planned for early 2027 to create a “sustainable industry”.
The best-selling cars overall last year were the Ford Puma and the Kia Sportage, while the most popular pure battery EV was Tesla’s Model Y.
All three are SUVs.
Tanya Sinclair, chief executive of pressure group Electric Vehicles UK, said EVs offer “strong value for money” and “best-in-class performance”, but called for “clearer, more consistent policy signals” to boost the number of motorists making the switch.
Ginny Buckley, the chief executive of EV buying advice website Electrifying.com, said “education will unlock the next wave of EV buyers, not uncertainty”.
Ian Plummer, chief commercial officer of online vehicle marketplace Autotrader, said the UK “could be getting close to the tipping point on electrified vehicles” as “nearly half of all new cars sold last year were electric or hybrid”.
Decarbonisation minister Keir Mather said a £7.5 billion investment by the Government is “driving EV uptake”.
He added that the Department for Transport is “determined to maintain this momentum” through measures such as extending the electric car grant and supporting the roll out of more public chargers.
The market share of new petrol cars fell from 52.2% in 2024 to 46.4% last year, while diesels saw a decline from 6.3% to 5.1% over the same period.
Hybrids that cannot be plugged in – which combine a petrol engine and an electric motor powered by a battery – achieved a 13.9% share of the new car market, up from 13.4% in 2024.
The UK Government has pledged to outlaw sales of new petrol and diesel cars from 2030, with only zero-emission models permitted from 2035.
Last month, the European Commission watered down its total ban on the sale of new petrol and diesel cars from 2035.
The new plan is for 90% of new cars sold from that date to be zero-emission.
The figures released by the SMMT are based on preliminary data.
Confirmed statistics will be published at 9am on Tuesday.
