What do UK BEV sales reveal about the 2025 ZEV mandate?

06 January 2026

The UK’s new-car market ended 2025 with growth. But what happened with battery-electric vehicle (BEV) deliveries? Did they reveal a zero-emission vehicle (ZEV) mandate problem? Autovista24 special content editor Phil Curry reviews the numbers.

The UK’s new-car market ended 2025 well, growing 3.9% year on year in December, according to data from the SMMT. In total, 146,249 passenger cars were delivered to customers in the month, 5,463 units more than in December 2024.

December was the sixth month of improvement for the UK market last year. With a uniform mix of ups and downs, 2025 provided a mixed reception for new cars. Internal-combustion engine (ICE) popularity dropped, the full-hybrid (HEV) sector slowed, and BEVs were polarising.

However, the overall picture of 2025 was one of positivity. For the first time since 2020, the market achieved over two million registrations across the 12-month period. In total, 2,020,520 new cars were registered, a 3.5% improvement against 2024.

But with challenges continuing, will the country’s new-car momentum continue, and can potential new-car buyers be inspired in the year ahead? 

A complex picture

While the figures are encouraging, the UK’s automotive industry encountered a number of hurdles last year. Many of these related to electric vehicles (EVs), as the government sought to encourage uptake, while evening the tax balance.

The ZEV mandate required 28% of a carmaker’s fleet sold last year to be either battery-electric or hydrogen fuel-cell powered. Having come into effect in 2024, this target increases from 22%. This year, carmakers will need to reach 33%.

Earlier in 2025, the UK government made amendments to the mandate, reducing the penalties for missing targets and increasing flexibility. However, it appears this was not enough.

BEVs only made up 23.4% of all registrations, revealing the market as a whole was still behind. This was further away than the 2024 result, with a 19.6%. With both years indicating shortcomings, what does this mean for 2026 and the future of the legislation?

BEV incentives not helping

To help boost BEV uptake, a new incentives programme, the Electric Car Grant, was launched in July, with up to £3,750 (€4,330) being offered against eligible models. However, many options did not meet the requirements for this maximum discount, instead qualifying for the lower £1,500 band.

In late August, the Ford Puma Gen-E and Ford E-Tourneo Courier were the first models to make the top grade.

Since then, just six other models have met the requirements for the maximum discount. Meanwhile, 38 derivatives now sit in the second band. This includes cars from Volkswagen Group, Kia, Renault Group and Stellantis.

The SMMT highlighted that more than 160 BEVs could be purchased at the end of 2025. Therefore, 28.8% of available BEVs were eligible for the Electric Car Grant, and only 5% qualified for the maximum subsidies.

This meant manufacturers continued to shoulder the burden of driving up demand, especially to meet the ZEV-mandated target. According to the SMMT, carmakers subsidised BEV sales themselves by more than £5 billion, equivalent to around £11,000 per unit.

A future shock?

While a push for electrification intensified last year, there were also many mixed messages. In April, BEV models became eligible for vehicle excise duty (VED). This meant that drivers are required to pay £10 for their vehicle’s first year of registration, then £195 a year after.

Exemption from the Expensive Car Supplement was scrapped, although the threshold was later raised from £40,000 to £50,000 for BEVs. From the second year of registration, models receive an additional annual tax of £425. This is on top of the standard rate for five years.

In the November Budget, plans for a ‘pay-per-mile’ scheme for BEVs and plug-in hybrids (PHEVs) was announced. eVED is set to come into effect in 2028 and will see all-electric models pay 3p per mile, while PHEVs will be charged 1.5p. However, these vehicles will also be paying fuel duty, making their overall rate per mile much higher.

From the start of 2026, BEV drivers must also pay London’s congestion charge, from which they were previously exempt.

Ban ahead

These changes come as the EU is looking to push back its 2035 ban on new petrol and diesel car sales. Its earlier targets could also be more flexible, with banking and borrowing allowed between 2030 and 2032

According to Auto Express, the UK government plans to stick to its plans for a new-car petrol and diesel ban from 2030. Yet, with lacking BEV registrations and tax changes likely to put a strain on demand, further consideration may be needed.

‘Rising EV uptake is an undoubted positive, but the pace is still too slow and the cost to industry too high. Government has stepped in with the Electric Car Grant, but a new EV tax, additional charges for EV drivers in London and costly public charging send mixed signals,’ commented SMMT chief executive Mike Hawes.

‘Given developments abroad, government should bring forward its review and act urgently to deliver a vibrant market, a sustainable industry and an investment proposition that keeps the UK at the forefront of global competition,’ he added.

BEV growth misses the mark

Despite the rollercoaster of announcements, BEVs ended 2025 with solid growth. In total, 473,348 units were delivered to customers, a rise of 23.9% compared to the same period in 2024. This equated to an increase of 91,378 units, according to Autovista24 calculations of SMMT figures.

The 23.4% BEV market share was up by 3.8 percentage points (pp) year on year. However, this indicated below the 28% required of carmakers by the ZEV mandate. Since the first eligible vehicles for the Electric Car Grant were announced in August, this share has increased by just 0.8pp. Yet growth slowed, dropping from 29.5% across the first eight months of 2025 to the 23.9% recorded after 12 months.

December saw a registration improvement of 8%, with 47,139 BEVs taking to UK roads in the month. This was enough for a 32.2% market share, up by 1.2pp. This was the second consecutive month of single-digit growth, following a 3.6% rise in November.

The monthly results may be skewed by a pull-forward effect from the previous year. Carmakers rushed registrations into 2024, as they sought to meet the ZEV mandate requirement of 22%. With stricter penalties for missing this target, numbers in November and December 2024 may have been inflated. This makes the comparison with this year’s figures imbalanced.

Standout performance from PHEVs

In terms of volume growth, the best powertrain performance of 2025 came from PHEVs. With a 34.7% rise across the 12-month period, 225,143 units made their way to customers. This was 57,965 more registrations than the whole of 2024.

The result meant the powertrain’s market share remained stable from November’s year-to-date result at 11.1%. This was up by 2.5pp year on year.

In December, PHEVs proved to be the standout powertrain. Volumes grew by 32.9% in the month, with 16,898 units delivered. This was enough for an 11.6% share of total registrations, up 2.6pp year on year.

This growth is especially impressive considering PHEVs are not eligible for the Electric Car Grant. Yet volumes were still some way off from BEV totals.

Combining BEVs and PHEVs, the EV market saw growth of 27.2% in 2025, with 698,491 registrations. This gave it a 34.6% share of the market, up 6.5pp.

In December, EV deliveries increased by 13.6% to 64,037 units, giving the technology a 43.8% market share. This 3.8pp increase allowed the technology to beat ICE registrations for the first time, albeit by just 0.2pp. However, EVs have closed the gap from a 26.2pp difference since January. Should this continue, the UK will start 2026 with a shift in powertrain dynamics.

Hybrid slowdown continues

While EVs powered forward in 2025, HEVs saw slower sales growth. Unlike other major European markets, the UK does not combine full and mild-hybrid (MHEVs) models into one category. Instead, MHEVs are included within their respective petrol and diesel markets.

At the end of 2025, HEVs represented 13.9% of total registrations across the year. Volumes grew by 7.2%, with 280,185 units taking to UK roads.

This performance meant that over the 12 months of the year, HEVs were just 2.8pp ahead of PHEVs in terms of market share. This gap has narrowed slowly across the year, a trend that could continue into 2026.

In December, HEVs accounted for 18,430 registrations, up 3% year on year. This gave the powertrain a 12.6% market share, down by 0.1pp compared to the same month in 2024.

Adding HEVs to the EV total, the electrified market ended the year with 978,676 registrations, an improvement of 20.7% year on year. Despite a 6.9pp increase, their 48.4% share was not enough to topple ICE.

However, in December, electrified deliveries outperformed ICE for the fourth consecutive month, accounting for 56.4% of all registrations. With an 11% jump and 82,467 units leaving dealerships, this sets up the UK market for electrified dominance in 2026.

Petrol and diesel struggle again

Petrol deliveries were down by 8% across the 12 months, with 937,938 registrations. This was 81,190 units below its tally in 2024. The powertrain still dominated the UK new-car market, with a 46.4% share of deliveries, but this was down by 5.8pp year on year.

Diesel’s decline continued, with just 103,906 registrations, a 15.6% fall compared to 2024. In total, 19,198 fewer units were delivered to customers. The technology’s 5.1% market share was down by 1.2pp.

In December, petrol registrations fell by 3.1%, with 57,607 units making their way to customers. This was enough for a 39.4% market share, down 2.8pp. There was just 7.2pp between petrol and BEVs in terms of share, the closest the two powertrains have been all year.

Yet this may also have more to do with market manipulation in December 2024 than BEVs proving more popular. In that month, carmakers likely held back petrol deliveries to help them meet their BEV targets. This resulted in a 20.9% drop in registrations for the fuel type, their biggest fall since June 2022.

Diesel suffered a 12.5% decline in December, with 6,175 deliveries. This was good enough for a 4.2% market share, down 0.8pp.

Is ICE dominance over?

The ICE market ended 2025 as the dominant force in terms of volumes. In total, 1,041,844 petrol and diesel models were registered, down 8.8% year on year. The group still led the market with a 51.6% share, although this was down by 6.9pp.

Yet the ICE market seems to have finally run out of fuel. It was beaten by EVs and electrified models in December. 63,782 UCE units were registered, a 4.1% decline. This gave the powertrain group a 43.6% share, down 3.6pp compared to the same month in 2024.

If 2026 begins as 2025 ended, the year will see a shake-up in powertrain dynamics for the UK market. ICE will no longer dominate, with EVs and electrified models out ahead. But with tax changes and confusion over the electrification direction, 2026 may be a rollercoaster for the country’s new-car market.