The UK car market has rebounded significantly over the last 12 months, as two million new vehicles were sold, and one in four chose an electric vehicle.
New data from the Society of Motor Manufacturers and Traders (SMMT) revealed that car registrations reached 2.02 million in 2025, with the market increasing 3.5 per cent year-on-year.
Electrified cars made up almost half of the market, with 473,348 battery electric vehicles sold, in addition to 280,000 hybrids and 225,000 plug-in hybrids.
The volume of electric cars registered in 2025 was more than 2021 and 2022 combined, with the UK likely to place in second across Europe for EV sales.
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Petrol retained its hold on the market, with a total share of 46.4 per cent, while diesel slumped to 5.1 per cent of the market.
Despite this, year-on-year sales dropped eight per cent for petrol and 15.6 per cent for diesel, with just over 100,000 new diesel cars being registered.
Annual sales were boosted by a strong December, with 146,249 vehicles registered, representing a modest 3.9 per cent increase compared to the same period last year.
Mike Hawes, chief executive of the SMMT, said sales in 2025 represented a "reasonably solid result" given difficult economic and geopolitical factors.
The UK saw more than two million new vehicles sold over the last 12 months
|PA/GETTY
He added: "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."
There are more than 160 battery electric vehicles on the market, with automotive brands set to release a further 60 in the coming 12 months.
The SMMT highlighted how car companies are largely shouldering the cost of discounting electric vehicles, at a total cost of more than £5billion.
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This is equivalent to £11,000 per electric vehicle registered, despite the additional £1.3billion Government backing to the Electric Car Grant announced by Chancellor Rachel Reeves in the recent Autumn Budget.
However, there is optimism that the UK has achieved its Zero Emission Vehicle (ZEV) mandate target, given that manufacturers are able to trade credits to meet targets.
New AutoMotive estimates that the real market-wide ZEV target is actually 20.51 per cent, rather than the headline figure of 28 per cent.
Additional research from the organisation shows that Tesla, Volkswagen, BMW, Geely, BYD and SAIC all have a huge ZEV credit balance, whereas Nissan and Stellantis have the largest deficit.
The Ford Puma Gen-E is one of eight models included in the £3,750 Electric Car Grant | FORDBen Nelmes, CEO of New AutoMotive, said the massive increase in EV sales was down to "pragmatic policy that rewards carmakers for the billions they are investing in delivering EVs that British motorists increasingly want".
Experts from the transport research group stated that sales totals in December indicated the UK had a good chance of meeting its ZEV target of 33 per cent by 2026.
Tanya Sinclair, CEO of Electric Vehicles UK, added: "One in three new car buyers chose electric last month, a meaningful milestone. But it's also important to focus on the two-thirds who didn't.
"Some are weighing up future road-pricing proposals, others are unsure whether current incentives apply to the models they want. That points to a need for clearer, more consistent policy signals."