SMMT: New car market falls in April as tax changes bite

The UK’s new car market fell -10.4% in April, with 120,331 units registered, according to the latest data published today by the Society of Motor Manufacturers and Traders (SMMT). It was the sixth fall in the last seven months, reflecting a fragile economic backdrop and weakened consumer confidence, with 13,943 fewer cars registered in the month compared with the year before and 25.3% behind pre-pandemic April 2019.¹

In what is traditionally a quieter month following the March plate change, volumes were also impacted by the late timing of Easter, resulting in fewer working days. In addition, the implementation of VED changes affecting all new cars, including the Expensive Car Supplement which became applicable to many new EVs from 1 April, pushed transactions into March as shrewd buyers got ahead of the tax increases.

Registrations fell across all sales types, with private, fleet and business demand down -7.9%, -11.9% and -10.9% respectively. Continuing market trends, fleet buyers drove activity, responsible for six in 10 registrations. In terms of powertrain performance, demand for hybrid electric vehicles (HEVs) fell -2.9%, with petrol and diesel registrations down –22.0% and –26.2% respectively. Conversely, registrations of vehicles with a plug rose: plug-in hybrids (PHEV) up 34.1% and battery electric vehicles (BEV) increasing 8.1% to 24,558 units, taking more than a fifth (20.4%) of the market.

There is now a huge range of BEVs on the market, with more than 130 models available – including an increasing number at lower price points – the result of massive investment by manufacturers to offer electric options for all consumers across all segments. Year-to-date the new car market is up 3.1% and, with new BEV registrations up 35.2% to push market share to 20.7%, these models are now the second most popular powertrain after petrol but still below the 28% required under market regulations. While government’s recently proposed amendments to the Zero Emission Vehicle Mandate requirements are welcome – recognising the intense pressure on the sector – the targets remain incredibly challenging and more must be done to stimulate demand.

The importance of government incentives to boost volumes remains paramount. Halving VAT on new EV purchases; scrapping, or amending, the VED Expensive Car Supplement; and equalising VAT paid on public charging to that levied at home would all help boost the market and send a strong signal to any hesitant buyers that now is the time to go electric.

Mike Hawes, SMMT Chief Executive

April’s performance is disappointing but expected after March’s surge. Another month of growth for electric vehicle registrations is good news, however, even if demand remains well below ambition. Recent government adjustments to flexibilities and compliance within the ZEV Mandate are welcome and an important first step in relieving some of the pressure on the market and manufacturers.

However, EV uptake is still being heavily and unsustainably subsidised by the industry which is why a compelling package of measures from government is essential if consumers are going to make the switch.

The news comes as the latest market outlook revises up full year 2025 new car registrations to 1.964 million units but keeps 2026 expectations below the two million mark for what would be the seventh successive year. Market share expectations for new BEV registrations, meanwhile, remain fairly constant with only a marginal revision downward from the January view, by -0.2 percentage points to 23.5% for this year, and by -0.3 percentage points to 28% next year, compared with the ZEV Mandate targets of 28% and 33% respectively.

1: UK new car sales up in March 2025 and down in all other months since October 2024.
1: https://nielseniq.com/global/en/news-center/2025/uk-consumer-confidence-down-four-points-in-april-to-23/
1: 161,064 units registered April 2019

SOURCE: SMMT