SMMT new registrations: EV sales jump amid fears of slowdown as tax changes hit

The latest SMMT new registrations data saw battery electric vehicle (BEV) registrations continue recent growth trends, with volumes up by 41.7% year-on-year in February, representing a 25.3% overall market share.

However, the BEV market is still falling below government’s 28% target set for 2025, with the latest outlook anticipating a 23.7% market share this year. Overall, the new car market contracted by 2.5% to 139,345 units.

Sheena McGuinness, Co-head of Energy and Natural Resources at RSM UK, comments: “Despite a slowdown in the overall new car market, it’s encouraging to see that electric vehicles (EVs) represent more than a fifth of new car registrations. However, the jump in EVs compared to the rest of the market is to be expected due to the incoming tax changes from 1 April 2025.

February is the fifth consecutive month of decline and there’s growing industry concern that meeting the zero emission vehicle (ZEV) mandate is becoming more of a pipe dream. There’s also the added challenge that removal of the vehicle tax exemption further threatens the affordability of EVs for many drivers, as vehicles fall under the expensive car supplement for the first time. With the number of EV registrations also remaining well below the government’s 28% target set for 2025, the outlook for this year looks bleak without government intervention. Ahead of incoming tax hikes for road users, industry is therefore urging the Chancellor to reconsider her approach in this month’s Spring Statement.”

She added: “Aside from falling short of government targets, there’s also wider geopolitical tensions which will have a knock-on impact on EV car registrations later in the year. Although the UK is exempt from Trump’s trade tariffs, the 10% tariff on Chinese goods imported to the US will cause a ripple effect and a slowdown in global trade, which could potentially lead to ramifications for British car manufacturers and a loss in overseas sales. To address this, government must incentivise potential buyers and make EVs more attractive and affordable, while eliminating infrastructure challenges to ensure all drives have accessible charging networks.”