Six consecutive months of UK new car sales growth

Maria Bengtsson, EY UK & Ireland Mobility Leader, comments on the Society of Motor Manufacturers and Traders (SMMT) new car registration figures for May 2026: 

“UK new car sales rose for a remarkable sixth consecutive month in May, with a 7.1% year-on-year increase to 160,662 units. Against a backdrop of geopolitical uncertainty, subdued economic growth, weak consumer sentiment and a complex trade and regulatory landscape, this marked the best performance for May since 2019. 

 “Battery Electric Vehicle (BEV) registrations continue to contribute the lion’s share of new car sales growth, with a significant 34.2% year-on-year rise last month, resulting in a year-to-date market share of 27.3%, up slightly from 26.2% the previous month. This remains below the 33% Zero Emissions Vehicle (ZEV) Mandate target, despite these encouraging green shoots. With a diverse and growing range of EVs being introduced to the market by automakers, future prospects for the shift towards cleaner and greener transport continue to improve. However, the UK is yet to cross the threshold between early uptake and mass adoption, with both improving and increasing charging infrastructure key priorities to unlock further progress. 

“The disparity between EV demand and ZEV Mandate targets is increasing the need for automakers to subsidise EVs, which is impacting profitability. The House of Commons Business and Trade Committee is lobbying for changes to the legislation which, if implemented, could provide important support to Original Equipment Manufacturers (OEMs). 

 “Meanwhile, reports that vehicles manufactured in the UK could qualify for ‘Made in Europe’ subsidies have provided some encouragement to automakers in the UK, and could support  growth in the future.  If confirmed, this would be welcome news amid supply chain volatility, which could increasingly weigh on manufacturing if the Middle East conflict persists. 

“Plug-in Hybrid Electric Vehicle (PHEV) registrations also increased at a significant rate last month, with a 23.9% uptick, while hybrids saw 1.8% year-on-year growth. In contrast to April’s surprising 8.2% year-on-year rise, petrol registrations returned to decline in May with a modest 7.1% year-on-year fall. Meanwhile, diesel registrations fell once again, with a 2.2% year-on-year decline.” 

 Continuing retail and fleet sales growth

Maria added: “Crucially, as the more profitable sales channel for automakers, retail sales have shown significant momentum in recent months, handing an encouraging boost to the UK automotive industry. This encouraging trend extended into May, with a 17.2% year-on-year rise in retail sales. Meanwhile, fleet sales built on the substantial growth seen in April, albeit with a much smaller 1.8% year-on-year rise last month. 

“UK automakers should undoubtedly be proud of what they have achieved over the last few months, but it is imperative that they remain agile and vigilant. Ongoing geopolitical disruption has significant ramifications for fuel prices, trade relationships and supply chains, and although retail sales have been strong it is unclear whether the recent growth trend is sustainable. Compelling price propositions where feasible, diversifying product portfolios and carefully navigating the complex regulatory landscape will continue to be pivotal going forward.”