People visit the BYD booth at the 2023 International Motor Show, officially known as the IAA MOBILITY 2023, in Munich, Germany. The UK new car market recorded its busiest February since 2004, with registrations rising 7.2% to 90 100 units, according to the Society of Motor Manufacturers and Traders (SMMT). Private retail sales drove much of the growth, climbing 17.6% to 35 227 vehicles, while fleet registrations edged up 1.8% and business demand fell 12.7%.
Fleets remain the dominant segment, accounting for nearly 60% of all new cars sold. Among individual models, the Ford Puma held the top spot, continuing its strong performance in the compact SUV segment. Battery electric vehicles (BEVs) grew 2.8% to 21 840 units, representing 24.2% of the market, but February marked the second consecutive month of decline in year-on-year market share.
Analysts attribute this to a strong early uptake in 2025, ahead of new tax rates in April, and last year’s push to comply with the Zero Emission Vehicle Mandate. Plug-in hybrid vehicles (PHEVs) saw the most dramatic growth, up 43.5% to an 11.6% share, while conventional hybrids rose 3.3% to 13.1%. Petrol demand grew 5.2%, though its market share slipped to 46.5%, and diesel volumes continued to fall, down 3.8% to just 4.5% of the market.
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With BEV market share at 22% year-to-date, two-thirds of the 33% target mandated for 2026, March is expected to be pivotal. Manufacturers have invested heavily in new models, marketing campaigns, and discounts, supported by the government’s Electric Car Grant. Yet uncertainty remains, with plans for a pay-per-mile EV tax (eVED) from 2028 creating potential barriers for buyers and raising calls for a holistic review of the transition.
Mike Hawes, SMMT Chief Executive, said: “The UK car market is recovering, and EV volumes are growing, but uptake is not yet sufficient. March’s new plate registrations will set the tone for the year. Manufacturers have made huge investments, but the transition must match natural demand.” ~ SMMT Adding to market uncertainty are proposed European Union rules under the Industrial Accelerator Act (IAA), designed to strengthen local manufacturing, sustainability, and supply chain resilience.
Draft legislation would require EVs to source a significant proportion of components, battery cells, and steel from the EU, with some proposals setting thresholds as high as 70% for local content. Critics argue these measures could disrupt global supply chains and create trade tensions with key partners, including the UK, Turkey, and Morocco. The combination of strong domestic recovery and evolving European policy means the UK automotive sector faces a critical period. February’s surge demonstrates resilience in the market, but with EV adoption challenges and international regulatory hurdles looming, manufacturers, policymakers, and consumers alike will be closely watching developments in the coming months.
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