Fuel price volatility boosts EV market, but transition incentives needed
According to the latest SMMT new registrations data new car registrations reached 156,571 units in July, a year-on-year increase of 11.7%.
Battery electric vehicle (BEV) registrations increased by 44.5% year-on-year to 43,106 units, accounting for 27.5% of market share, mirroring a global trend of rising electric vehicle (EV) sales amid heightened energy prices.
Commenting on the latest data, Sheena McGuinness, Co-head of Energy and Natural Resources at RSM UK, said: “Today’s figures demonstrate sustained electric vehicle (EV) appetite in the UK, as ongoing concerns around the price and availability of fuel increase their appeal as a viable alternative to petrol and diesel cars. This follows the latest data from the International Energy Agency (IEA), which revealed a 35% surge in global EV sales in Q2 of 2026, amid a 5% decline in overall car sales between January and June, with EV sales reaching record levels in 50 countries. In countries such as Australia, Brazil, India, Korea and Vietnam, EV sales roughly doubled year-on-year between March and June 2026.
“With renewed tension in July sparking further elevation in fuel prices, following a slight ease in June, we are likely to see this upward trend in EV sales continue into Q3. For the UK, this marks a positive step towards the government’s zero emissions mandates. The challenge now lies in maintaining market appetite for EVs amongst a backdrop of persistent and widespread economic challenges.
“Access to charging remains a key challenge to EV transition efforts. We are yet to see any meaningful action on the recommendations published by the Environment and Climate Change Committee in 2024, which included addressing discrepancies between the VAT rates for domestic and private charging. And, with the new government announcement of a VAT tax cut for electricity bills, there is a risk that this will exacerbate the cost disparity between private charging and public charging, which will still require consumers to pay the full rate of VAT.
“Ensuring wider, long-term energy transition goals are met will require support and investment from the new government, to help address the key barriers which threaten to hinder future EV market growth.”/