The UK’s new car market saw a modest uptick in May, with registrations rising 1.6% year-on-year to 150,070 units, marking the best May performance since 2021. However, volumes remain 18.3% below pre-pandemic levels, highlighting persistent economic fragility.
Fleet and business buyers drove the recovery, accounting for nearly two-thirds of the market. Fleet registrations rose 3.7%, while business volumes surged 14.4%. In contrast, private sales declined for the second consecutive month, down 2.3%, underscoring a cautious consumer outlook.
Demand for electrified vehicles climbed sharply. Battery electric vehicle (BEV) registrations increased by 25.8% year-over-year, accounting for 21.8% of the market. Plug-in hybrids (PHEVs) grew 50.8%, while hybrid electric vehicles (HEVs) increased by 6.8%. Combined, electrified models captured 47.3% of new car sales. However, BEVs remain below the regulatory target, with a year-to-date market share of 20.9%, which is short of the mandated 28%.
Manufacturers continue to rely heavily on discounting and incentives, particularly for electric vehicles (EVs), to sustain momentum. This reliance, coupled with existing cost pressures, raises concerns about long-term profitability and investment in product development.
The breadth of electrified offerings has expanded, with over 135 battery electric vehicles (BEVs) now available. Despite this, calls for stronger government support, through VAT cuts and tax reforms, are growing louder as the industry pushes toward net-zero targets.
