New vehicle registrations by fleets declined by 1.5% in October, which was offset by a 2.0% increase in registrations by private buyers, according to figures published by the Society of Motor Manufacturers and Traders (SMMT).
Business registrations rose by 32.7%, but as a very small volume portion of the market, the SMMT said this sector is always subject to volatility.
The overall new car market remained stable in October as registrations rose 0.5% to reach 144,948 units.
New electrified vehicles were the only powertrain to record growth in October, largely driven by battery electric vehicle (BEV) uptake.
New BEV registrations rose by 23.6%, equivalent to 7,028 additional units.
While October’s growth was more modest, year to date the overall BEV market is now up 28.9%, at 386,244 units – more than registered in the whole of 2024 – with two months still to go before the year ends.
As a result, BEVs took a 25.4% market share, the second highest recorded this year, although still short of the 28% target set by the ZEV Mandate.
BEVs now account for 22.4% of all new sales, due to manufacturer investment and, more recently, Government support through the Electric Car Grant.
Plug-in hybrid vehicle (PHEV) uptake rose 27.2% to account for 12.1% of the market, while hybrid electric vehicles (HEV) posted growth of 2.1% to claim a 13.3% share.
Combined, electrified vehicles comprised the majority of new car registrations for the second consecutive month, with 50.8% of the market.
The latest quarterly industry outlook anticipated that the overall new car market for 2025 will top two million units (2.012 million) for the first time since pre-pandemic 2019, with BEVs expected to account for 23.3% of uptake.
For 2026, the overall market is expected to reach 2.032 million units, a moderate improvement on the previous outlook, with the BEV outlook maintained at 28.2%.
While this would represent progress, it would still fall short of mandated targets for 2026, which call for zero-emission vehicles to comprise one in three new car registrations.
The gap is set to widen in 2027, with BEV share anticipated to hit 32.2% against a 38% target.
However, the SMMT warned that this modest growth is at risk due to the Government’s plans to end Employee Car Ownership Schemes (ECOS).
These schemes play a key role in attracting talent into the UK Automotive sector, enabling employees to access the products they make and sell in an affordable manner.
The Government’s plans to make ECOS vehicles liable for company car tax would lead to the closure of these schemes, putting vehicles out of reach for most workers and reducing the supply of new and increasingly zero-emission vehicles into the market.
With around 100,000 cars supplied via ECOS a year – equivalent to around 5% of the annual new car market – such a step could depress growth and impact the nearly-new and used markets.
More than £1bn in revenue would be lost to the industry and 5,000 manufacturing jobs put at risk, while the Treasury would incur a £0.5bn hit from lost VAT and Vehicle Excise Duty receipts.
The total cost would be more than double that allocated to the Electric Car Grant, effectively wiping out the growth it is intended to stimulate.
Mike Hawes, chief executive of SMMT, said: “The government has backed the UK automotive sector with EV incentives and global trade deals, helping drive growth and encourage decarbonisation.
“But scrapping ECOS would undermine that progress – penalising workers, reducing Exchequer income and putting green investment at risk.
“At a time when the Budget should fuel growth, the measure will do the exact opposite. It is time for a rethink.”
Reactions:
Helen Thorne, spokesperson for the Leasing Broker Federation (LBF):
“October’s marginal 0.5% rise in new car registrations shows the market holding safe, strong and steady as we head into the final quarter of the year.
“After September’s seasonal surge, this stability is a positive sign that both private and business confidence remain resilient despite ongoing economic uncertainty and the approaching Autumn Budget.
“While battery electric vehicles (BEVs) adoption dipped slightly, growth in hybrid and plug-in hybrid models highlights that drivers and fleets are still flowing steadily towards electrification, albeit with increased caution.
“For leasing brokers, that balance of affordability and choice is crucial, they continue to help customers navigate the transition with flexible finance options and expert guidance.
“With supply conditions improving and demand remaining consistent, brokers are well-positioned to carry this steady momentum through to the end of year.”
Jon Lawes, managing director of Novuna Vehicle Solutions:
“Cost and charging remain the biggest barriers to mass EV adoption. While progress is being made, the transition is still fragile.
“The UK is not yet on track to deliver the 300,000 public chargers needed by 2030, with access still heavily concentrated in London and the South-East.
“For the millions without driveways, charging remains far from straightforward — removing planning barriers to cross-pavement charging is a practical, common-sense step that would make it as easy as parking on your street.
“Affordability is the other key hurdle. Extending grants to more models helps, but most buyers choose used cars, and that market is still overlooked.
“Without targeted incentives for used EVs and faster commercial charging, adoption across both cars and vans will continue to lag — with van decarbonisation struggling to meet the UK’s 16% ZEV target.”
