New car registrations in the UK fell 5.0% year-on-year in July to 140,154 units, marking the weakest July performance since 2022, according to data released by the Society of Motor Manufacturers and Traders (SMMT) on Monday.
The figure was also 10.8% lower than levels seen in July 2019, prior to the pandemic, highlighting the continued volatility in the market. Private registrations fell 3.2% to 51,646 units, while fleet sales dropped 6.5% to 85,594 units. Business registrations, which represent a smaller share of the market, rose 10.4% to 2,914 units.
Sales declined across most vehicle segments, with only Dual Purpose, Mini, and Luxury Saloon models seeing increases. Battery electric vehicle (BEV) registrations grew 9.1% in July, while plug-in hybrid electric vehicles (PHEVs) rose 33.0%. However, the growth in BEVs was among the slowest so far this year, reflecting a moderation following stronger performance in earlier months.
Despite the growth, BEVs captured 21.3% of the market, still below the 28% target set by the UK’s Zero Emission Vehicle (ZEV) Mandate. The recently announced Electric Car Grant, which offers up to £3,750 in discounts, has yet to confirm eligible models, prompting some buyers to delay purchases.
Industry data suggests that fiscal changes, including the Vehicle Excise Duty (VED) Expensive Car Supplement introduced in April, are weighing on BEV demand. The policy could add over £360 million in additional cost to electric vehicle buyers this year alone, dampening enthusiasm in the private market.
Sales of hybrid electric vehicles (HEVs) declined 10.0% to 18,551 units, while combined petrol and diesel registrations fell 14.0% to 74,289 units, though they still accounted for 53.0% of the overall market.
Despite July’s decline, year-to-date registrations remain up 2.4% at 1.18 million units, including more than 250,000 BEVs. Analysts expect the downturn to be temporary, with the 2025 market forecast revised upward to 1.9 million units. BEVs are expected to account for 23.8% of the total volume.