UK new car sales rebounded in December as impact of pre-Budget uncertainty faded

Maria Bengtsson, EY UK & Ireland Mobility Leader, comments on the Society of Motor Manufacturers and Traders (SMMT) new car registration figures for December 2025:

“Following a modest fall in November amid uncertainty ahead of the Autumn Budget and consumer confidence challenges, new car sales returned to growth in December, with a 3.9% year-on-year rise to 146,249 units. December’s increase sealed a year of modest yet encouraging growth for UK new car registrations in 2025, with 3.5% year-on-year growth, testament to the resilience of the automotive sector given the range of complex economic headwinds and broader challenges the industry has faced in recent times.

“Overall, Battery Electric Vehicle (BEV) registrations saw 23.9% year-on-year growth in 2025, underscoring the significant progress of the UK’s EV transition over the last 12 months. BEV market share in December reached 32.2%, however BEV market share across the whole of 2025 (23.4%) was still some way below the 28% Zero Emissions Vehicle (ZEV) Mandate target, which shows there is still work to be done if future targets are to be met.

“The greenshoots for the UK’s EV transition should not be downplayed, particularly given the recent additional support and funding announced in the Autumn Budget, which could help to accelerate growth in 2026. However, the latest EY Mobility Consumer Index revealed that an increasing number of car buyers are looking towards petrol and diesel vehicles for their next purchase, and there are still consumer concerns around upfront EV purchase costs, limited range and expensive battery replacement. The survey was conducted before the Autumn Budget so some of this downbeat sentiment may since have subsided, but the insights highlight the challenges of encouraging mass market EV adoption.  

“Whilst findings of the latest UK Mobility Consumer Index were surprising, particularly given that both Plug-in Hybrid Electric Vehicle (PHEV) and Hybrid sales both saw growth in 2025 (11.1% and 13.9% year-on-year upticks respectively), they do reveal that official industry figures don’t always reflect the full story around consumer attitudes. Communicating the benefits and advantages to consumers of making the switch to an EV, as well as improving perceptions around the experience of owning an EV, will be crucial going forward.”

Retail sales returned to growth in December

Maria added: “After falling back in November, retail sales returned to growth in December, with a significant 16% year-on-year uptick. Stimulating retail sales growth will be a pivotal challenge for automakers in 2026 given that the UK economy’s growth prospects and consumer confidence continue to appear relatively subdued. In contrast, fleet sales saw a modest year-on-year decline in December, with a 2.4% fall. However, both retail (4.5%) and fleet (2.6%) sales rose year-on-year across the course of 2025, providing crucial support to the UK’s automotive industry.”