New car sales in the UK grew by 3.5% last year, driven by a surge in demand for electric vehicles. This increase represents the third consecutive year of growth, with 2.02 million new cars registered in 2025. The demand for electric vehicles was particularly strong, with registrations up 23.9% year-on-year to 473,340, accounting for a market share of 23.4%.
The growth in electric vehicle sales is partly due to the UK government's zero-emission vehicle mandate, which set a target for at least 28% of cars sold by each manufacturer to be zero-emission. However, the actual sales requirement to avoid penalties was estimated to be lower, at 20.4%. Industry leaders have expressed concerns about the cost of meeting these targets, with manufacturers discounting new electric vehicles by a total of £5.5 billion in the UK last year.
The UK's electric vehicle market is expected to place the country as the second largest in Europe, behind Germany. However, industry leaders have warned that the pace of electric vehicle adoption is still too slow and that the cost to the industry is too high.