05 March 2025
The UK’s new-car market saw another month of decline in February. However, the sector’s registration performance was still strong, with electrified models leading the way. Autovista24 special content editor Phil Curry examines the data.
In contrast to its performance in 2024, the UK’s new-car market started this year poorly, with registrations declining in February.
The latest data from the SMMT shows that registrations fell 1% last month. In total, 84,054 new cars were delivered to customers, a drop of 832 units compared to February 2024.
However, the second month of last year was the best February result in 20 years, according to the industry body. This means that despite the decline, last month’s result was still a strong performance.
Between 2020 and 2023, there was disruption due to COVID-19 and supply-chain issues. When instead comparing deliveries to February 2019, the market was up 2.5%.
February is usually the smallest-volume month of the year. Last year, the month made up just 4.3% of the total yearly registrations.
Yet, the decline was the country’s fifth consecutive registration drop. The UK was one of Europe’s most stable markets, with two years of growth between August 2022 and August 2024. Now, new-car volumes are struggling, as regulation changes start to bite, with more problems ahead.
With January’s drop in deliveries, the result in February leaves the UK market down by 1.9% across the first two months of the year. This equates to a gap of 4,363 units.
ICE registrations slip
February’s slide was caused by declines in the petrol and diesel markets. These two powertrains were the only ones to see losses in the month. A significant drop in petrol registrations alone accounted for most of the damage.
The fuel type saw deliveries fall by 17.3%, to 39,865 units. This meant a gap of 8,346 registrations compared to last year. The SMMT combines petrol and diesel mild hybrids with their respective fossil-fuel counterparts. So, the powertrain still led the market in the month. But its market share of 47.4% was down by 9.4 percentage points (pp) against February 2024.
This result means that across the first two months of the year, petrol registrations were down 16.1%, with 109,940 registrations. This is a drop of 21,024 units compared to the same period last year. It captured 49.2% of total deliveries, down 8.3pp.
Petrol’s unit loss in February was too much to be reversed by the electrified markets. However, a decline for diesel also added to the total internal-combustion engine (ICE) plunge.
Diesel registrations dropped 15.1% in the month, with 4,241 units equating to a loss of 754 deliveries. The technology’s market share fell by 0.9pp, to 5%. In the year to date, diesel figures were down 10.3%, with 12,866 deliveries. This is a loss of 1,477 units. The fuel type represented 5.8% of registrations, down from its 6.3% share recorded at the same point in 2024.
The problem with ICE registrations
These declines meant that in February, total ICE registrations in the UK fell by 17.1%. The technology still dominated the market with a 52.5% share of deliveries, but this fell 10.2pp compared to last year.
In the year to date, ICE registrations have dropped 15.5%. The powertrain grouping made up 55% of the market, down from its 63.8% share recorded 12-months prior.
ICE registrations have been in decline for some time. One possible explanation for their poor start this year is the updated targets in the UK’s zero-emission vehicle (ZEV) mandate.
In 2025, carmakers must ensure that 28% of their total registrations across the year are made up of ZEVs. With the current uncertain nature of BEV sales, manufacturers may be slowing the delivery of ICE options, or even removing from sale. This would alter the balance of their fleets in favour of zero-emission models.
The new EU regulations on CO2 emissions targets may also be affecting things. Some marques may be reducing their petrol and diesel line-ups to help them meet the stricter requirements. While not a member of the union, it is unlikely that brands will produce models specifically for the UK market.
Therefore, 2025 may be a difficult one for ICE powertrains. Even with mild hybrids incorporated into their numbers, there are likely to be more months of struggles ahead.
BEV bounce ahead of changes
February’s place as the quietest month for new-car volumes in the UK is due to two factors. Firstly, March sees the introduction of new registration plates, with buyers often waiting for their release before having their vehicle delivered.
Secondly, its position just after the festive period means buyers may be putting off high-value purchases. However, February’s numbers were helped by a significant rise in battery electric vehicle (BEV) registrations. The all-electric technology surged 41.7% in the month, with 21,244 deliveries. This was an improvement of 6,253 units year on year.
The result meant that BEVs accounted for 25.3% of total registrations, up from 17.7% recorded at the same point last year. Therefore, one in four deliveries in February was an all-electric model.
The result means that across the first two months of the year, BEV volumes have risen 41.6%, with 50,878 registrations. This is a gain of 14,952 units. The technology held 22.8% of the market in this period, up by 7pp. This was above the 2024 ZEV mandate target of 22%, but still below this year’s threshold of 28%.
All-electric numbers are likely to increase again in March. This is because from April, BEVs will be subject to the country’s vehicle excise duty (VED). This is set at £10 (€12) for the first year of registration, followed by an annual charge of £195. Models registered before 1 April 2017 will only be subject to a £20 yearly payment.
All-electric at a cost
However, BEVs with a list price above £40,000 will be subject to the expensive car supplement (ECS). This is paid yearly between the second and sixth year of a vehicle’s registration. According to the SMMT, this could add £2,125 to the cost of running a BEV over its first six years, on top of the additional VED charge.
‘Relative to the rest of the market, BEVs are disproportionately affected as higher production costs meaning the average BEV retails above the ECS threshold, a threshold which remains unchanged since its introduction in 2017,’ the SMMT highlighted
‘The introduction of this measure also risks disincentivising the used-car market as well as the new, impeding a faster, fairer transition, ’ the body added.
It stated that carmakers have already underwritten the transition by more than £4.5 billion in discounts over the last year alone. This is on top of the billions invested in developing and bringing the vehicles to market.
‘Although February’s figures show a subdued overall market, the good news is that BEV uptake is increasing, albeit at huge cost to manufacturers in terms of market support,’ added SMMT chief executive Mike Hawes.
‘It is always dangerous, however, to draw conclusions from a single month, especially one as small and volatile as February. With the all-important March number plate change now upon us, and tax changes taking effect in April that will, perversely, dissuade EV purchases, we expect significant demand for these new products next month but, long term, BEV consumers need carrots, not ever more sticks,’ he added.
Power to the hybrids
The UK’s plug-in hybrid (PHEV) market also had a strong month. Registrations increased by 19.3%, or 1,175 units, compared to February 2024. A total of 7,273 deliveries meant the powertrain made up 8.7% of overall volumes, up 1.5pp year on year.
Over the first two months of the year, PHEVs have seen a 10.1% improvement in numbers, with 1,829 more models taking to UK roads. This brings the year-to-date total to 19,871 units and equates to an 8.9% share of total deliveries in the year. This is up 1pp on the same period in 2024.
Combining BEVs and PHEVs, the electric vehicle (EV) market increased by 35.2% in February. Plug-in captured 33.9% of total registrations, an improvement of 9.1pp year on year. In the first two months of 2024, EV registrations have grown by 31.1%. This gave plug-ins a 31.7% market share, up 8pp.
Meanwhile, HEVs improved by 7.9% in February, with 11,431 deliveries. This was a rise of 840 units, leaving the technology with a 13.6% share of registrations, an increase of 1.1pp compared to one year ago.
The technology’s figures have grown 4.8% so far in 2024, with 1,357 more registrations increasing the 2024 total to 29,844 units. The technology accounted for 13.4% of overall volumes, an improvement from its 12.5% share recorded across January and February last year.
Adding HEVs to the EV total, the electrified market grew 26.1% last month. Its total share of registrations reached 47.5%, up 10.2pp. The powertrain grouping surged 22% in the first two months of the year. The electrified market represented 45.1% of total deliveries, up from 36.2%.
