Demand for new cars falls by 2.5% in January
Industry body the Society of Motor Manufacturers and Traders said 139,345 new cars were registered in the UK last month.
Registrations of new cars fell by 2.5% last month, figures show.
Industry body the Society of Motor Manufacturers and Traders (SMMT) said 139,345 new cars were registered in the UK in January.
That compares with 142,876 during the same month last year.
The fall was driven by a 15.3% drop in deliveries of petrol cars.
There was a 41.6% spike in the uptake of pure battery electric cars, resulting in a market share of 21.3%.
Under the zero-emission vehicle (Zev) mandate, at least 28% of new cars sold by each manufacturer in the UK this year must be zero-emission, which generally means pure electric.
Failure to abide by the mandate or make use of flexibilities – such as buying credits from rival companies or making more sales in future years – will result in a requirement to pay the Government £15,000 per polluting car sold above the limits.
SMMT chief executive Mike Hawes said: “January’s figures show EV demand is growing, but not fast enough to deliver on current ambitions.
“Affordability remains a major barrier to uptake, hence the need for compelling measures to boost demand, and not just from manufacturers.
“The application, therefore, of the expensive car supplement to VED (vehicle excise duty) on electric vehicles is the wrong measure at the wrong time.
“Rather than penalising EV buyers, we should be taking every step to encourage more drivers to make the switch, helping meet Government, industry and societal climate change goals.”
From April 1, drivers of EVs will need to pay VED for the first time.
This will be £195 per year for most people affected, but drivers of new electric cars with a list price exceeding £40,000 will be charged up to £620 per year because of the expensive car supplement.
Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said: “January marked a lacklustre start to 2025 for the new car market, as registrations fell for the fourth month in a row.
“This year will offer its fair share of challenges for established brands, amid economic uncertainty, tariff threats from the US and fierce competition from a growing array of new Chinese entrants.”
Transport Secretary Heidi Alexander is hosting a meeting with major car manufacturers on Wednesday to discuss changes to the Zev mandate, which could include making it easier for non-compliant manufacturers to avoid fines.
There will also be talks on the phase-out of new petrol and diesel car sales from 2030.
Ben Nelmes, chief executive of green consultancy New AutoMotive, said: “Even with all the uncertainty around the Government’s review of EV targets, electric car sales are still going up, turning the UK into Europe’s leading EV market.
“Ministers need to keep up the pace. Any sudden changes to the rules could put the brakes on all the progress the UK has made and undermine the billions of investment in charging points and battery factories which are set to create thousands of jobs here in the UK.”
Dan Caesar, chief executive of lobby group Electric Vehicles UK, said: “At this growth rate, the UK would be on track for a greater than 25% BEV (battery electric vehicle) market share.
“But with the best sales likely at year end due to the Zev mechanism, and more affordable EVs launching, we believe the 28% target is achievable.”
