The UK’s new car market has continued its recovery into 2026, with the latest figures from the Society of Motor Manufacturers and Traders (SMMT) revealing steady overall growth alongside a sustained rise in electric vehicle (EV) sales.

Although sales are still struggling to reach pre-pandemic levels, the outlook is improving.

With the current Middle East crisis affecting oil and pump prices, EV sales are rising.

Four wheel fever

Recent data shows that new car registrations are climbing, with February 2026 delivering the strongest performance for that month in more than two decades.

A total of 90,100 vehicles were registered, up 7.2% year-on-year, signalling renewed confidence among buyers despite ongoing economic uncertainty.

The broader trend is equally positive.

Across 2025, registrations exceeded two million units for the first time since before the pandemic, marking a 3.5% annual increase and reinforcing the market’s gradual recovery.

However, the most significant shift within the market continues to be the rise of electric vehicles.

Battery electric vehicles (BEVs) now account for a growing share of sales, with almost one in four new cars registered in 2025 being fully electric.

So far in 2026, EV momentum has continued, albeit unevenly.

BEV registrations rose modestly in February by 2.8% to 21,840 units, capturing a 24.2% market share.

While this represents growth in absolute numbers, it also reflects a slight dip in market share compared with the previous year, highlighting the volatility of the transition.

Plugging in

Looking longer-term, the SMMT expects EV adoption to accelerate significantly.

Forecasts suggest BEV volumes could rise by more than 20% in 2026, pushing market share towards 28–32% as manufacturers expand their electric offerings and consumers respond to changing costs and incentives.

The shift is not limited to new cars.

The used market is also seeing rapid electrification, with second-hand EV sales jumping by 45.7% in 2025 to record levels.

This reflects growing consumer confidence in electric technology and improved availability of more affordable models.

External factors are also driving demand.

Rising fuel prices and geopolitical uncertainty have encouraged more motorists to consider switching away from petrol and diesel vehicles.

Recent industry reports suggest EV sales reached record highs in early 2026, with market share exceeding 22% in some months.

Cultural change

Despite this progress, the industry remains behind government targets.

Under the UK’s Zero Emission Vehicle (ZEV) mandate, EVs are expected to account for around 33% of new car sales in 2026.

Current levels—hovering in the low-to-mid 20% range—indicate a significant gap still needs to be closed.

Industry leaders have warned that achieving these targets will require stronger consumer incentives, expanded charging infrastructure, and clearer long-term policy direction.

While manufacturers are investing heavily in new electric models, concerns remain around affordability, charging access, and consumer confidence.

At the same time, the transition is reshaping the wider automotive landscape.

Petrol and diesel vehicles still dominate, but their share is steadily declining, while hybrid and plug-in hybrid models are also gaining traction as a stepping stone towards full electrification.

Jump starting

The latest SMMT figures highlight both progress and challenge.

The UK car market is growing again, and the shift towards electric mobility is firmly underway.

Yet the pace of change is uneven, and significant barriers remain.

As the industry navigates economic pressures, regulatory demands and evolving consumer behaviour, the coming years will be critical.

Whether EV adoption can accelerate quickly enough to meet national targets and reshape Britain’s roads remains one of the defining questions for the automotive sector.

However, the recent record rise in diesel and petrol prices due to the closure of the Strait of Hormuz has already led to rising enquiries and sales of EVs, and this will undoubtedly be reflected in the next set of official figures next month.