The UK’s new car market struggled again in August, as the country’s indifferent year continued. However, following the announcement of EV incentives in July, the electrified market has moved closer to market domination.
According to data from the SMMT, a total of 82,908 new passenger cars were registered in the month, 2% down year on year.
Together with February, August is one of the UK’s lowest-volume months, as buyers wait for the ‘plate change’ in the following month. Therefore, this represents a decline of 1,667 models.
Across the first eight months of the year, the UK market is up by 2.1%, with 1,265,281 units delivered. This position is thanks to a strong performance in the first plate-change month of March. Should September provide a similar boost, it is likely the country will end the year with a registrations improvement, unless any serious declines occur.
Fleets dominate
Fleet uptake dominated the month, making up 59.1% of all new car taking to the road. This is despite a 4.6% reduction in volumes. Uptake by private buyers grew by just 0.7% to account for 39% of registrations. Meanwhile, the business sector improved by 41.6%, although this equated to fewer than 500 additional units, and a 1.9% share.
The dominance of the fleet market will translate into good news for the aftermarket in the coming years. These models often enter the used-car market after three years, and with no ties to main dealers, many will be serviced by the independent sector.
However, fleets are continuing to move towards electric vehicles, and this will be even more significant in the coming months, as EV incentives apply to these models as well. Therefore, the used-car market is likely to be flooded with cheaper, de-fleeted battery-electric vehicles (BEVs) in the next few years.
With a decline in new car registrations as well, there is likely a trend of drivers holding on to their vehicles for longer. As the UK car parc continues to age, and fleets driving registrations, the future could be bright for workshops, as long as technicians stay up-to-date with the latest automotive technologies.
BEVs continue their upward trend
Registrations of BEVs improved by 14.9%, with 21,969 new models taking to the country’s roads. This was, however, the third-lowest improvement of the year, highlighting the momentum the technology built up in the first quarter, and the slow start to the EV incentives scheme.
Yet the 26.5% market share achieved is the highest seen in 2025 so far, and was the fourth-highest share on record, according to the SMMT. This repeated a feat seen in 2023 and 2024, where low August volumes and high fleet uptake helps improve the overall BEV share.
Across the first eight months of the year, BEV deliveries are up 29.5%. This is thanks to three consecutive months between January and March, when registrations improved by over 40%. In total, 276,635 all-electric models have taken to roads, up by 63,091 units.
This gives BEVs a 21.9% market share, an increase of 4.7pp year on year. This is, however, some way below the 28% requirement in the country’s zero-emission vehicle (ZEV) mandate. With just four months of reporting left, the UK government’s EV incentives scheme will have a lot of heavy lifting to do, in order to bring this share up.
The issues with EV incentives
August is the second month of reported registrations since the introduction of EV incentives in the UK market, following its introduction in July. The scheme sees a discount of £3,750 for band one battery-electric vehicles (BEVs), while those in the second tier receive £1,500 towards their list price.
However, it may not be until the new-plate month of September before the impact of EV incentives is seen. Buyers could be waiting to collect their cars from dealerships with the latest registrations, or seeing if any further models are announced as qualifying for the discounts.
When announced, the scheme was planned to boost BEV uptake, with fanfare on discounts of up to £3,750 on a new model. However, as time has progressed, questions have been raised as to the actual potential of the EV incentives.
There are currently 35 passenger cars, listed by the UK government, that can receive the grant. However, of these, 33 are only available in band two, with a discount of £1,500.
This includes models from Volkswagen (VW) Group, Stellantis, Renault and Toyota. These are big tier manufacturers, yet their environmental credentials have struggled to meet the strict requirements of the scheme. This highlights the difficulty of carmakers achieving top tier eligibility, leading to restricted choice for buyers.
Only two cars are available with the full £3,750 EV incentives discount. These are both from Ford, the Puma Gen-E and the E-Tourneo Courier. While the next-generation Nissan Leaf is expected to join these models, that is still a small number for the much-vaulted maximum discount.
Tighter EV incentives thresholds
In addition, the government has now tightened the EV incentives scheme, restricting the model options available to qualify. Previously, the vehicle cost cap of £37,000 was aimed at base-trim models. This meant as long as the lowest-specification version was available at, or under, the threshold, all models in that range were eligible.
At the end of August, these rules were amended to place a £5,000 restriction on ranges. Now, while the base-model must still sell below £37,000 to qualify, any trim-level over £42,000 will not be discounted by the scheme.
This prevents carmakers lowering base-model prices to qualify for EV incentives, while offering the rest of their range at full price. It also, however, reduces the choice for drivers, with many models still expensive.
For example, the Toyota bZ4x was available with a £1,500 grant from the EV incentives scheme across the three models in the range. With the new limits, only one, the base-level Pure, is eligible for the lower discount, with the other two outside the £42,000 cap.
“There is still substantial ground to make up to reach the ZEV mandated targets so September, which is typically the second busiest month of the year, will be pivotal,” commented SMMT Chief Executive Mike Hawes.
“Manufacturers have put immense investment and innovation into the transition, with more than 140 car models available in the UK as zero emission, while at the same time offering unprecedented and unsustainable discounts to accelerate demand.”
PHEVs on the up
In terms of improvement, the best powertrain performance came from the plug-in hybrid (PHEV) market. Deliveries were up 69.4%, with 9,803 units finding their way to customers in August. The result is even more impressive considering PHEVs are not covered under the EV incentives scheme. Therefore, any discounting comes directly from manufacturers, while demand is not stimulated by external announcements.
PHEVs took an 11.8% market share, up 5pp against August 2024. This meant it achieved a greater share than full hybrids (HEVs), making it the UK’s third-best powertrain technology.
Between January and August, PHEVs saw registrations improve 33.7%. This keeps the powertrain as the best-performing in terms of volume increase, a position it took from BEVs in July. Their 10.5% market share in the eight-month period is up 2.5pp.
Combining BEVs and PHEVs, the EV market grew 27.6% in August, with 6,830 new models taking to the roads. This gave the plug-in sector a 38.3% share, up from 29.4% a year prior. Interestingly, this growth is more to do with the improvement in the PHEV market, while EV incentives may not come into play within the figures until September’s results
Meanwhile, in the year-to-date figures, EVs are up 32.5%, an improvement of 7.2pp on the same period last year. This is the highest the share has been, and is approaching a third of the market. With the EV incentives, this share could be boosted in September above the one-third threshold.
Hybrids struggling
For the first time this year, HEVs have fallen to the fourth-most-popular powertrain type in a month. During August, 9,456 full-hybrid models were registered, a drop of 13.9%, equating to 1,521 fewer models.
This was the third-consecutive month of declines for the technology, with its market share falling to 11.4%, from 13% last year.
Over the first eight months of 2025, HEVs have seen registrations increase by 5.1%, with 174,784 units delivered. This overall rise in volumes has dropped from a high of 18.7% in March, with four monthly declines since then. This means the technology’s market share sits at 13.8%, just 0.4pp up year on year.
Adding HEVs into the EV mix, electrified models increased by 14.9% in August, with 5,352 additional models taking to the country’s roads. This gives the technology mix a 49.7% market share, up 7.3pp.
This means electrified vehicles are close to becoming the dominant powertrain technology in the UK in the monthly reports. With the country mixing mild-hybrids into their respective internal-combustion engine (ICE) figures, this would be a significant development.
Is ICE dominance over?
That milestone could be reached in September. With petrol and diesel continuing to slide, and more buyers turning to BEVs and PHEVs, the new plate month could provide a boost to electrified models. HEVs may also end their slump, which may help the combined technologies achieve at 50% or more market share. Buyers waiting for models eligible for EV incentives will also likely push registrations up in this area.
Petrol saw 37,373 registrations in August, a drop of 14.2%, or 6,161-units, year on year. This was the fuel-type’s lowest volume of the year so far.
The poor performance left the fuel type with a market share of 45.1%. This was still the leading figure in the UK new car market, but represented a drop of 6.4pp compared to August 2024.
Between January and August, petrol volumes have fallen 10.3%, with their share of overall registrations down 6.7pp, to 48.1%. In total, 608,484 models have been delivered to customers.
Meanwhile, diesel also saw its lowest volume of 2025, with 4,307 units taking to UK roads in August. This was a drop of 16.6%. The figure meant a hold of just 5.2% of total registrations, down 0.9pp.
In the first eight months of the year, diesel has seen volumes decline 11.3%, with 71,047 registrations. This equates to a 5.6% market share, down 0.9pp.
Combining the two, the ICE market fell 14.4% in August, with 7,019-fewer units delivered. The sector maintained its dominant position, but only just, with a 50.3% market share. This was down from 57.6% recorded in the same period last year.
Meanwhile, in the year-to-date figures, ICE registrations are down 10.4%, with volumes down by 79,063 units. Their 53.7% share of total registrations in 2025 has fallen by 7.5pp. This means the gap between ICE and electrified continues to close as the year draws on, and is likely to do so further should the EV incentives inspire the market this month.
