July 4, 2025

UK New Car Market Mid-Year Review

By Rob Harvey

The UK’s new car market saw a strong performance in June 2025. Looking back on the first half of the year, there looks to be pretty significant changes in consumer behaviour, brand standings, and the ongoing transition to electrification. The latest figures from the Society of Motor Manufacturers and Traders (SMMT) show a 6.7% year-on-year increase for June, with 191,316 new registrations. This is the strongest June since 2019. However, even with this growth, the market remains nearly 18% below pre-COVID levels.

EVs Are Proving Popular

Electrification continues to gain acceptance, with battery electric vehicles (BEVs) achieving a 39.1% rise compared to June 2024. Electric vehicles now account for almost a quarter of all new registrations (24.8%). Plug-in hybrids (PHEVs) also saw strong growth, up 28.8%, while conventional hybrids (HEVs) dropped by 8.5%.

Interestingly, EVs held a 48.5% market share in June. For the first half of 2025, BEV registrations rose 34.6% to 224,841 units, representing 21.6% of the total market. This is still short of the 28% target mandated under the Zero Emission Vehicle (ZEV) mandate, but it seems that EVs are catching up to ICE cars.

EV Discounts

Industry-wide discounting continues to play a big role in sustaining EV sales. The SMMT estimates that more than £6.5 billion in discounts have been given over the past 18 months to maintain demand. This process of discounting and self-registrations by manufacturers and dealers has helped push EV numbers up, but it also raises questions about the true level of consumer demand.

“A second consecutive month of growth for the new car market is good news, as is the positive performance of EVs. That EV growth, however, is still being driven by substantial industry support with manufacturers using every channel and unsustainable discounting to drive activity, yet it remains below mandated levels. As we have seen in other countries, government incentives can supercharge the market transition, without which the climate change ambitions we all share will be under threat.”
Mike Hawes, SMMT Chief Executive

The SMMT estimates that more government incentives over a three-year period could put an additional 267,000 EVs on UK roads and cut CO₂ emissions by six million tonnes annually.

Chinese Brands Take Over

One of the biggest takeaways from the latest figures is that Chinese car manufacturers have had a huge impact so far in 2025. Brands like BYD and OMODA and JAECOO have seen incredible growth. For example, BYD is up 570% year-on-year. Together, these Chinese brands are now matching traditional car makers like Audi in volume.

If you look at why the Chinese manufacturers are selling so well, they offer competitively priced, tech-heavy EVs and hybrids that are proving extremely popular with value-conscious buyers. Even lesser-known names like Leapmotor and Skywell are starting to get noticed too, while Geely, the parent company of Volvo and Polestar, is preparing to enter the UK market directly later this year.

Traditional Brands Might Be Struggling

As Chinese brands rise, some of Europe’s most recognisable names are struggling. Citroën is down 41%, SEAT 42%, and Audi 18% compared to the same period last year. Other established brands like Nissan, Honda, and Fiat have all experienced double-digit declines, despite the overall market growing by around 4%.

That being said, Volkswagen remains the UK’s top-selling brand, up 13% year-on-year. Polestar has also grown by 204% thanks to its expanded model lineup. Other brands experiencing strong growth include Jeep (+76%) and Alfa Romeo (+50%). Peugeot, Mazda, Cupra, Genesis, Renault, Skoda, and Volvo all also had double-digit increases.

Tesla, after a challenging spring, has recovered somewhat in June, although some of that growth is linked to a weak performance in the same month last year.

Ford is also starting to maintain its position, thanks to expanding its electric offering from one model in 2024 to four in 2025.

Market Outlook

With EVs getting closer and closer to overtaking petrol and diesel vehicles in market share, and Chinese brands establishing themselves as big players, the UK new car market is undergoing a rapid transformation. The second half of 2025 will be extremely important as to whether the UK can hit its EV targets and how traditional brands respond to growing competition.