The UK’s new-car market started 2026 with a year-on-year improvement. However, growth was predominantly driven by the plug-in hybrid (PHEV) market, as BEV demand stagnated.
In total, 144,127 new passenger cars were registered in the country during January. This was a 3.4% improvement, according to data released by the SMMT. The month is traditionally a slower one for new-car deliveries in the UK, highlighted by the unit-total increase of just 4,782 models.
January marked a second-consecutive month of improvement, and the country’s automotive market will be hoping for a better start to this year than last. January 2025 began a rollercoaster year with a decline, the first of six monthly drops in volumes in the 12-month period.
Should February prove positive, it would be the first period of three-or-more successive months of growth since between August 2022 and July 2024. This highlights how the country’s market has proven inconsistent since August 2024.
However, the SMMT is optimistic about 2026. The UK motoring authority has revised its forecast from October 2025, and projects a 1.4% rise in volumes across the year, reaching 2.048 million units.
But January’s results for some powertrains came up against strong results last year, creating a different picture for the beginning of 2026.
BEV share falls
The UK’s BEV market stalled last month, as exceptional circumstances combined to impact figures. With 29,654 registrations, volumes increased by just 0.1%. This equated to 20 more units taking to UK roads compared with January 2025.
This was the worst year-on-year result for BEVs since December 2023. Both these poor results are the work of external market dynamics. At the end of that year, carmakers held back BEV registrations, so they counted towards the zero-emission vehicle (ZEV) mandate.
This introduced percentage ZEV targets for carmakers to meet in 2024 and beyond. By keeping deliveries at bay, manufacturers got a boost toward their mandated requirements in the year. However, in doing this, December 2023 saw a 34.2% decline in BEV volumes.
Fast forward to January 2025, and another market change led to a three-month period of growth above 40%. In this instance, it was the introduction of vehicle excise duty (VED) in April 2025 that caused a pull-forward effect. Drivers rushed to have their BEVs registered before the implementation, to avoid an initial one-off VED cost.
A further pull-forward effect at the end of 2025, as carmakers rushed to meet the year’s ZEV mandate target, may also have impacted January figures. These combined factors, together with a traditionally slower month for deliveries, have skewed the overall BEV result.
This left the powertrain with a market share of 20.6%, the lowest recorded since April 2025. This was also a drop of 0.7 percentage points (pp) compared to January 2025.
Difficult times ahead for BEVs
This may be a concern for the industry. In 2026, the ZEV mandate target for carmakers to achieve is 33% of their fleet. This is up from 28% last year. The overall market only achieved a 23.4% share across 2025, so starting with a decline is not the optimal position for the sector to be in.
However, the SMMT has revised its forecast for BEV uptake from its previous October predictions. The powertrain is expected to reach a 28.5% share of the UK new-car market by the end of this year. This would represent progress over 2025, but still fall short of the mandated target.
Still, the industry body is calling for a holistic review of the UK’s transition to BEVs. The country is still on course to ban sales of new petrol and diesel models from 2030, despite a pushback on similar plans in the EU.
With sales slowing, despite the country’s Electric Car Grant incentive scheme, the UK Government launched a new campaign in January to highlight the benefits of going electric. Yet with the new eVED pay-per-mile scheme set to come into effect in 2028, the SMMT believes demand will be further suppressed in the coming years.
‘Britain’s new car market is building back momentum after a challenging start to the decade. It is also decarbonising more rapidly than ever and, despite a January dip in EV market share, the signs point to growth by the end of the year,’ commented SMMT chief executive Mike Hawes.
‘The pace of the transition, however, may be slowing and is certainly behind mandated targets. With sales of new pure petrol and diesel cars planned to end in less than four years, there needs to be a comprehensive review of the transition now, to ensure ambition can match reality,’ he concluded.
PHEVs provide UK relief
While BEVs struggled, its electric vehicle (EV) stablemate, PHEVs, provided the reason for the UK’s positive start to the year. Without the 18,557-unit total achieved by the powertrain, the whole market would have experienced a 0.9% decline.
The 5,959-unit extra volume achieved equated to a 47.3% year-on-year increase. This marked the technology’s best performance since September 2025, and continued a streak of double-digit improvements that stretches back to February 2025.
This also meant PHEVs achieved a 12.9% market share, up by 3.9pp. This left the powertrain just 0.5pp behind the full-hybrid (HEV) market. PHEVs closed this gap across 2025, with shares in January of last year split by 4.2pp. This is a trend that looks set to continue in 2026.
Combining the plug-in volumes, the EV market saw 48,211 registrations in January. This was 14.2% higher than 12 months prior. This allowed for a 33.5% market share, up 3.2pp. However, EVs were unable to repeat their December high of beating the share of internal-combustion engine (ICE) models. This was thanks in part to the poor BEV performance, together with a stronger ICE result in the month.
Slow times for HEVs
The UK records hybrid registrations differently from other major European markets. Only HEV figures are counted in this category, while mild-hybrid totals are merged with their respective petrol and diesel counterparts.
In January, 19,027 HEVs were registered, a 4.8% improvement year on year. This equated to a rise of 884 units and a 13.4% market share, up 0.2pp.
The powertrain has seen slow growth in the UK. During 2025, the only months with double-digit volume rises were the plate-change periods of March and September. This has allowed PHEV registrations to catch up, suggesting an intriguing battle between the two hybrid technologies this year.
Combining HEV and EV figures, electrified vehicles recorded 67,508 registrations last month, up 11.3% year on year. This gave the grouping a 46.8% market share, up 3.3pp, but not high enough to topple the ICE segment. This was the first time since August that electrified powertrains were not the dominant grouping in the country.
ICE slide slows
While petrol registrations continued to decline in January, their 1.9% fall was the best monthly result since a 2.4% improvement since September 2025. In total, 68,757 units were delivered to customers, a drop of 1,318 units.
January marked the third month in a row of single-digit declines, suggesting the market’s fall is slowing. The 47.7% market share recorded in the month was down by just 2.5pp. The hold was the fuel-type’s best since March 2025, and was up 8.3pp compared to the result in December.
Meanwhile, diesel deliveries fell by 8.8%. However, with 7,862 units, this was a drop of just 763 registrations year on year. The powertrain took 5.5% of the UK’s total volume, a fall of 0.7pp.
Combined, ICE registrations achieved 76,619 units, a fall of 2.6%. The powertrain group returned to dominance in the month, with a 53.2% hold of the market, down 3.3pp.
The slowdown in the ICE decline helped towards the UK’s overall growth in January. However, with the new ZEV mandate target and the resurgence of PHEVs, 2026 could see swings towards electrified models, altering the country’s powertrain landscape.
