UK new car registrations rose by 1.6% year-on-year in May 2025 to 150,070 units, marking a modest but welcome rebound after April’s sharp 10.4% drop. This also represented the strongest May performance since 2021, signaling some resilience in the automotive sector.
UK new car sales rise by 1.6% in May
However, registrations remain 18.3% below pre-pandemic levels seen in 2019, highlighting the sector’s ongoing struggle to fully recover amid persistent economic headwinds, high interest rates, and subdued consumer confidence.
The growth in May was primarily driven by fleet and business buyers, with fleet registrations rising 3.7% and business purchases jumping 14.4%. These segments collectively made up 62.6% of all registrations, reflecting a continued reliance on corporate demand to sustain market momentum. Many companies appear to be renewing their fleets in anticipation of tightening emissions regulations and expanding low-emission zones.
Private consumer demand continued to soften
In contrast, private consumer demand continued to soften, falling 2.3%—its second monthly decline in a row. High borrowing costs, inflationary pressures, and uncertainty about future government policies, particularly surrounding electric vehicle incentives and fuel duties, appear to be weighing on household purchasing decisions.
From a fuel-type perspective, the shift toward electrification gathered pace. Registrations of petrol and diesel vehicles saw double-digit declines, down 12.5% and 15.5% respectively, as buyers increasingly turned away from traditional internal combustion engines. Electrified vehicles—comprising battery electric vehicles (BEVs), plug-in hybrids (PHEVs), and hybrid electric vehicles (HEVs)—continued to gain traction, collectively capturing 47.3% of the total market share. BEVs alone saw a year-on-year increase of over 6%, supported by expanding model availability and growing charging infrastructure.
Despite these encouraging signs of transition, challenges remain. Supply chain disruptions, particularly for critical EV components, continue to pose production constraints, while uncertainties around long-term EV affordability, charging access in rural areas, and second-hand market values are shaping consumer hesitancy. Still, industry stakeholders remain cautiously optimistic, pointing to upcoming policy announcements and potential rate cuts as possible catalysts for stronger growth in the second half of the year.
