UK car buyers face higher prices as EV mandate falls short
Key Points
- UK new car sales rose 24.0% in April to 149,247, the strongest April since 2019, but the rebound was flattered by an unusually weak comparison.
- BEVs took a record 26.2% share in April with the two millionth UK battery car registered, yet share so far this year sits at just 23.1%.
- The ZEV Mandate requires 33% of new car sales to be electric in 2026, leaving manufacturers facing rising compliance costs.
- SMMT has cut its full year 2026 BEV share forecast from 28.5% to 26.8% on weaker than expected demand.
- Industry warns the cost of compliance threatens consumer choice and could push UK car prices higher across both EV and combustion ranges.
UK new car registrations rose 24% in April to 149,247 units, according to the Society of Motor Manufacturers and Traders.
But battery electric vehicle uptake so far this year sits at 23.1%, nearly 10 percentage points below the 33% required by the Zero Emission Vehicle Mandate, raising the prospect of higher prices and narrower choice for buyers.
The April figure was the strongest reading for the month since 2019, when 161,064 cars were registered.
Fleet sales drove growth, climbing 26.8% to 90,462 units, while private retail rose 20.2% to 56,116. Petrol cars remain dominant with a 42.6% share, but plug-in hybrids and full electric cars together accounted for 40.0% of the market.
The April rebound flatters a soft underlying picture
The headline 24.0% rise is largely a base effect.
April 2025 saw buyers pull purchases forward into March to avoid Vehicle Excise Duty changes that brought BEVs into the road tax system and applied the Expensive Car Supplement to electric models for the first time.
Stripping out that distortion, the underlying market remains soft, with EV demand growing well below the pace assumed when the ZEV Mandate was formulated.
Notably, April saw the two millionth battery electric car registered in the UK since records began, with cumulative volumes reaching 2,012,758 vehicles.
April BEV registrations climbed 59.1% to 39,084 units, taking a 26.2% market share.
That is the highest monthly share recorded, although April is a typically low-volume month that magnifies swings between months.
The cumulative picture is less encouraging. BEVs make up 23.1% of registrations across the first four months, against the 33% threshold manufacturers must hit this year under the ZEV Mandate.
The shortfall persists despite the Electric Car Grant, introduced last year, which offers up to £3,750 off Band 1 EVs and £1,500 off Band 2 models priced at or below £37,000.
What the gap means for prices and choice
Manufacturers that miss their ZEV Mandate targets face fines of £15,000 per non-compliant car, must buy credits from compliant rivals, or borrow against future targets. To avoid penalties, brands have rolled out heavy EV discounts.
As The Car Expert reports, the majority of EV models on sale in 2026 carry some form of discount, either through the government grant, schemes funded by manufacturers, or both.
That looks like consumer good news on the surface, but the SMMT argues the discount approach is not sustainable. Mike Hawes, SMMT chief executive, said the “mounting cost of compliance threatens to limit consumer choice”.
In practice, the squeeze can hit buyers in three ways. Manufacturers may withdraw less profitable petrol or diesel variants from the UK to rebalance their average emissions, narrowing choice in popular segments.
EV discounts may shrink if compliance flexibilities tighten or carbon credit prices change.
And the prices of new petrol and diesel cars may rise to offset EVs sold at a loss, a pattern already documented across several European markets.
Outlook offers little reprieve for buyers
The latest SMMT outlook upgrades total UK new car volumes for 2026 to 2.093 million units, up from 2.048 million in January.
But BEV share has been revised down from 28.5% to 26.8%, with the 2027 forecast pointing to 32.0% BEV share, still around six points below the mandate.
For buyers, the same dynamics that defined the past year are likely to persist. EV discounts should remain available, particularly on smaller models such as the Renault 5, Citroën e-C3 and Ford Puma Gen-E that qualify for the maximum Band 1 grant.
The wider market will continue to shift, with manufacturers managing model mix, trim availability and pricing to navigate the regulation.
Hawes called for an urgent policy review, arguing that other major markets are revising their transition plans to reflect geopolitical and market realities, and warning that Britain risks an uncompetitive position if it fails to follow suit.
Without intervention, the gap between mandated EV share and underlying demand looks set to widen, leaving UK car buyers facing a narrower and more expensive market over the medium term.
