Car manufacturers in the UK provided a total of £5.5 billion in subsidies for buyers of electric vehicles last year, according to the Society of Motor Manufacturers and Traders. The average incentive per car amounted to £11,000, aiming to encourage more consumers to opt for electric cars despite their higher price compared to petrol and diesel models.
In addition to stimulating demand, carmakers were motivated to meet electric vehicle sales targets to avoid penalties. In cases where companies fell short of the required levels, they opted for partnerships with others to evade hefty fines.
Battery electric vehicles made up 32.3% of all new car registrations in December, marking the only month in 2025 when the 28% Zero Emission Vehicle (ZEV) mandate was achieved. The target for 2026 has been set at a more challenging 33% threshold.
Industry leaders are hopeful that future reviews, including a promised one by the Labour party, may lead to a relaxation of the targets. However, SMMT’s chief executive emphasized the ongoing pressure on the industry.
The SMMT reported a 3.5% growth in new car sales last year, reaching 2.02 million registrations. Pure battery electric vehicle registrations surged by 23.9% year-on-year to 473,340, constituting nearly a quarter of the market. Diesel and petrol cars combined still dominated over half of the market share, but electric vehicles are expected to surpass them by March.
Mr. Hawes highlighted the positive trend of increasing electric vehicle adoption but expressed concerns over the slow pace and high costs for the industry. He criticized the mixed messages from the UK government regarding electric vehicles, pointing out conflicting policies such as the introduction of electric car grants alongside a proposed pay-per-mile tax for EVs.
The best-selling cars in the UK last year were the Ford Puma and Kia Sportage, with Tesla’s Model Y leading the pure battery electric vehicle segment. Chinese-made cars accounted for 13.5% of the market share, including brands like MG and BYD.
Notable figures in the industry emphasized the value and performance of electric vehicles but called for more consistent policies to accelerate the transition to electric mobility. The UK government has committed to banning the sale of new petrol and diesel cars from 2030, allowing only zero-emission models from 2035.
Last month, the European Commission revised its ban on new petrol and diesel car sales, aiming for 90% of new cars sold in 2035 to be zero-emission vehicles.
