Industry calls for car tax rethink as private EV sales miss targets

The UK automotive industry is calling for more to be done to encourage private buyers into electric cars, as the latest sales figures reveal EV uptake is falling well short of the government's mandated targets. 

The 139,345 new cars registered in the UK last month included 29,634 pure-electric models, a significant 42% increase over the figure from this time last year, taking EVs to a 21.3% market share.

Sales of diesel cars, meanwhile, were 7.7% down, and there was a 15.3% drop in the number of petrol cars - but hybrid and plug-in hybrid sales were more steady, climbing 2.9% and 5.5%, respectively.

The rise of electrified car sales means petrol now fuels just over half of the UK new car parc, at 50.3%, and just 6.2% of new cars are diesel.

Nonetheless, the Society of Motor Manufacturers and Traders (SMMT) notes that the EV market share is still short of the 22% target that had been set for 2024 under the government's zero-emission vehicle (ZEV) mandate - and further still behind the 28% EV mix that manufacturers must achieve in 2025.

The government is currently consulting with the automotive industry on potential changes to the ZEV mandate framework, in recognition that organic demand for electric cars falls short of the targets imposed by the scheme – which rise in increments to 80% in 2030. Some car makers are having to sell EVs at a heavy discount or buy ZEV credits from rival firms to avoid highly punitive fines for missing the targets.

The EV market share will increase to 23.7% by the end of the year, the SMMT forecasts, still well short of the 28% mandate - and BVs are expected to comprise just 28.3% of the market in 2026 against a target of 33%.

"This gap between demand and ambition is why the review of the Vehicle Emissions Trading Scheme and its flexibilities is essential and must deliver meaningful changes urgently," said the SMMT, "else there will likely be significant negative consequences for the market, industry and potentially the consumer."

The trade body highlighted that discounts on EVs topped £4.5 billion in 2024, which "helped drivers make the switch", but said that "consumers are still reticent, looking for greater encouragement from government and elsewhere". 

There is currently no government-backed incentive scheme for private buyers to switch to EVs, following the removal of the plug-in car grant in 2021, so "retail buyers still lack a meaningful incentive to buy an EV", the SMMT added. 

Furthermore, the UK's Expensive Car Supplement (ECS) will be applied to electric cars from 1 April, which means any electric car costing more than £40,000 – a threshold set eight years ago – attracts a £3110 tax bill over the first six years of ownership.