UK new car registration growth shows no signs of slowing despite market headwinds – EY comments

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

“UK new car sales rose for a ninth consecutive month in August, with a 13.7% year-on-year increase to 94,236 units. The UK automotive sector’s acceleration into an extended period of consistent new car registration growth is a testament to the resilience of businesses across the industry – particularly automakers and retailers – against a backdrop of challenging regulatory targets, supply chain disruption, slow economic growth, subdued consumer confidence and geopolitical uncertainty.

“Momentum continued last month for Battery Electric Vehicle (BEV) registrations, with a significant 27.7% year-on-year increase, resulting in a year-to-date market share of 29.8%, up from 27.5% last month. August’s figure still falls short of the current 33% Zero Emissions Vehicle (ZEV) Mandate target for 2026, but this target remains under review via a consultation running until October 2026. If a potential deceleration in zero emission targets - which has been reported as a possibility - comes to fruition, the progress made this year could give automakers a realistic chance of regulatory compliance, and therefore reduced exposure to penalties going forward.

“Competition from Chinese OEMs with price-competitive product offerings will continue to present a difficult challenge for UK and European automakers in the coming months and years, and further progress needs to be made to improve charging infrastructure and consumer confidence towards EVs before mass adoption is likely to be achieved.

“Alternative powertrain technologies continue to increasingly appeal to buyers, with Plug-in Hybrid Electric Vehicles (PHEVs) seeing further growth last month (up 39.8% year-on-year), while hybrids saw a 26.3% year-on-year uptick. In keeping with trends seen in recent months, petrol (-3.5%) sales fell year-on-year in August – a pattern expected to continue in the coming months as the transition towards cleaner and greener transport gathers increasing pace. Diesel sales saw a modest 4% year-on-year increase last month, bucking the recent trend.”

Both retail and fleet sales continue to contribute to growth

“Retail sales saw another month of encouraging growth, with a 19% year-on-year uptick – providing further crucial support to profitability for automakers. Meanwhile, fleet sales also saw a continuation of recent momentum with a 10.1% year-on-year rise. The fact that September is a new plate month bodes well for the prospects of recent growth continuing in the near-term, but automakers and retailers must prioritise adaptability, agility, resilience and scenario planning against a backdrop which remains both complex and challenging.”