The UK new car market remained stable in October as registrations rose 0.5% to reach 144,948 units, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT).
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Electrified vehicles were the only powertrain technologies to record growth, largely driven by battery electric vehicle (BEV) uptake, registrations of which rose by 23.6%, equivalent to 7,028 additional units. As a result, BEVs took a 25.4% market share, the second highest recorded this year, although still short of the 28% target set by the ZEV Mandate. Plug-in hybrid vehicle (PHEV) uptake rose 27.2% to account for 12.1% of the market, while hybrid electric vehicles (HEV) posted growth of 2.1% to claim a 13.3% share. Combined, electrified vehicles comprised the majority of new car registrations for the second consecutive month, with 50.8% of the market.
While October’s growth was more modest, year to date the overall BEV market is now up 28.9%, at 386,244 units – more than registered in the whole of 2024 – with two months still to go before the year ends. BEVs now account for 22.4% of all new sales, thanks to massive manufacturer investment and, more recently, government support through the Electric Car Grant (ECG).
However, the SMMT warns that future market growth is at risk due to government plans to end Employee Car Ownership Schemes (ECOS). These schemes play a key role in attracting top talent into UK Automotive, enabling employees to access the products they make and sell in an affordable manner. Government plans to make ECOS vehicles liable for company car tax would lead to the closure of these schemes, putting these vehicles out of reach for most workers and reducing a crucial supply of new and increasingly zero emission vehicles into the market, the SMMT says.
With around 100,000 cars supplied via ECOS a year – equivalent to around 5% of the annual new car market – such a step would depress growth and seriously impact the nearly-new and used markets. The SMMT claims that more than £1bn in revenue would be lost to industry and 5,000 manufacturing jobs put at risk, while the Treasury would incur a £0.5bn hit from lost VAT and Vehicle Excise Duty receipts. The total cost would be more than double that allocated to the ECG, effectively wiping out the growth it is intended to stimulate.
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By GlobalDataGlobalData expects the UK car market to register around 2m units in 2025.
GlobalData says the forecast is subject to risks.
GlobalData analyst Jonathon Poskitt says the UK car market outlook remains challenging. “The mood is somewhat cautious on the outlook,” he says. “There is a tightening of fiscal policy in prospect and immediate growth prospects for the UK economy look weak. Consumer sentiment could take a sizeable hit after the government decides – given very high UK national debt levels – that it has no alternative but to raise taxes.”
Mike Hawes, SMMT Chief Executive, said: “The government has backed the UK automotive sector with EV incentives and global trade deals, helping drive growth and encourage decarbonisation. But scrapping ECOS would undermine that progress – penalising workers, reducing Exchequer income and putting green investment at risk. At a time when the Budget should fuel growth, the measure will do the exact opposite. It is time for a rethink.”
