Warning over unsustainable subsidies as almost 1 in 4 UK drivers are buying electric cars
New vehicle registrations show that 23.4% of new cars bought in the UK last year were fully electric, and the SMMT has warned that current electric vehicle subsidies shouldered by manufacturers are unsustainable.
This is according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), which showed that the UK’s new car market grew for the third year in a row in 2025, breaching 2 million new car registrations for the first time since the pandemic.
In December, battery electric vehicle (BEV) registrations spiked relative to the rest of the market in December, a trend seen in previous years.
More than two thirds of new vehicle registrations are fleet and business registrations, although demand from private buyers did increase by 4.5% compared with the year before.
Battery electric vehicle sales rose by 23.9% in 2025 to take a total of 23.4% of the market last year, while hybrid electric vehicle registrations also increased to a total market share of 13.9%.
The fastest-growing power train was petrol hybrid electric vehicles, which saw a massive 34.7% increase in registrations in 2025, now accounting for 11.14% of all new registrations.
The SMMT said the large spike in the volume of electric cars registered in 2025 is likely to place the UK as the second-biggest electric vehicle market in Europe.
UK buyers now have a choice of more than 160 battery electric vehicle models, with at least 60 more set to enter the market in 2026.
The SMMT said that while the long-awaited return of a grant for electric car purchases has helped adoption, only around a quarter of current models are eligible for the incentive, which has led to manufacturers needing to subsidise their own sales.
It said that manufacturers are shouldering an additional burden of £11,000 per battery electric vehicle registered, which it argued is clearly unsustainable.
“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,” said SMMT chief executive Mike Hawes.
“Rising EV uptake is an undoubted positive, but the pace is still too slow and the cost to industry too high. Government has stepped in with the Electric Car Grant, but a new EV tax, additional charges for EV drivers in London and costly public charging send mixed signals.”
“Given developments abroad, government should bring forward its review and act urgently to deliver a vibrant market, a sustainable industry and an investment proposition that keeps the UK at the forefront of global competition,” Hawes said.
