Modest new car growth but EV demand lags expectation

In encouraging news this week, SMMT’s latest figures show the new car market made a promising start to the year, with 3.5% growth in January – the strongest performance for the month since before the pandemic. The latest outlook is also optimistic about the sector’s ongoing recovery, anticipating further growth of 1.4% this year – a modest but welcome improvement on the October forecast. 

That optimism is largely fuelled by electrified vehicles, with January recording particularly robust growth in plug-in hybrid registrations which surged by nearly half. However, battery electric cars posted only a marginal 0.1% rise, with their market share slipping below 21%, although this follows an exceptionally strong December when manufacturers accelerated deliveries to meet regulatory targets. The latest projections suggest BEVs could account for 28.5% of registrations by year end. It is progress, certainly, but still significantly short of the 33% mandate target for 2026 – despite unprecedented levels of discounting, expanding model choice, government support and a growing charging network. 

The latest figures highlight the even starker challenge facing the new van market, which declined in January after a sharp -57% drop in pickup demand, underlining industry warnings about the impact of government’s double cab tax changes. While BEV registrations grew by nearly a quarter, this was only achieved through steep manufacturer discounts and government incentives – while there is uncertainty over how the Plug-in Van Grant will be distributed post April. With electric vans now representing just 10% of the market against a mandate target of 24%, demand will need to more than double to meet it – begging the questions of where that growth will come from and what future incentives might look like. 

The reality is that the assumptions underpinning the mandate’s creation have not materialised – and given the differing economic, political and industrial situation the sector now faces, a comprehensive review of the transition is needed, and urgently. 

It is against this backdrop that SMMT’s upcoming flagship Electrified event comes at a pivotal time. Taking place on 12 March 2026, it will bring together industry leaders, policymakers and stakeholders to focus on the practical steps needed to accelerate zero emission mobility – for consumers, fleets and businesses. 

With an inspiring line-up of panellists and keynote speakers, including Keir Mather MP, Minister of Aviation, Maritime and Decarbonisation, Department for Transport; Martin Sander, Member of the Board of Management for Sales, Marketing and After Sales, Volkswagen Passenger Cars; and Lisa Brankin, Chair and Managing Director, Ford of Britain, it is an event not to be missed and tickets are selling fast. To secure your place, book here.