UK new car market sees modest growth in May, driven by Fleet sales

The UK’s new car market saw a slight uptick in May, with registrations rising by 1.6% year-on-year to 150,070 units, making it the best May performance since 2021.

However, despite this growth, overall figures remain 18.3% lower than pre-pandemic 2019 levels, reflecting what the Society of Motor Manufacturers and Traders (SMMT) describes as “brittle consumer confidence and economic turbulence.”

The growth in May was primarily driven by fleet and business registrations, which increased by 3.7% and 14.4% respectively, accounting for a significant 62.6% of all new cars registered. In contrast, interest from private buyers continued its decline for the second consecutive month, falling by 2.3%.

Key Growth Drivers (May 2025):

The electric vehicle (EV) sector showed robust performance, with demand for the latest electrified models surging to command a combined 47.3% market share. Battery Electric Vehicle (BEV) registrations rose by more than a quarter, while Plug-in Hybrid Electric Vehicles (PHEVs) were up by over half (50.8%) and Hybrid Electric Vehicles (HEVs) grew by 6.8%.

Electrified Vehicle Uptake (May 2025):

Despite this positive momentum, BEV registrations are still below mandated levels. The sector is actively advocating for further government support to stimulate demand, calling for “VAT cuts on EV purchases and home charging plus VED reform.”

This push for incentives suggests that while electrified vehicles are seeing growth, ongoing financial stimuli are crucial to meeting wider adoption targets and overcoming current market hesitations.

Meanwhile, registrations for traditional petrol and diesel cars experienced double-digit declines, down 12.5% and 15.5% respectively.

Says Mike Hawes, SMMT Chief Executive:

“A return to growth for new car registrations in May is welcome but manufacturer discounting on new products continues to underpin the market, notably for electric vehicles. This cannot be sustained indefinitely as it undermines the ability of companies to invest in new product development – investments which are integral to the decarbonisation of all road transport.

“Next week’s Spending Review is the opportunity for the government to double down on its commitments to Net Zero by driving demand through fiscal measures that boost the market and shore up our competitiveness.”