Two Million Cars Sold, But EV Discounts Unsustainable

The UK saw a rebound in car buying last year, with just over two million new registrations — the highest total since the pandemic. But the impressive headline masks growing strain on the electric vehicle transition, industry figures warn. Data from the motor industry body show 2,020,373 new cars were registered in 2025. Almost half a million of those — 473,340 — were battery-electric, taking the EV share to 23.4%. That’s up on 2024 but still below the government’s Zero Emission Vehicles (ZEV) Mandate target of 28%, and short of a tougher 33% requirement set for this year. The Society of Motor Manufacturers and Traders (SMMT) says makers have been forced to cut prices heavily to hit those sales, estimating discounts totalled more than £5 billion last year — roughly £11,000 for every electric car sold. The SMMT’s chief executive welcomed the growth in EV numbers but warned those subsidies cannot continue indefinitely and asked for an earlier review of the mandate, which is currently due in 2027. Automakers do have breathing space from the rules. The ZEV framework allows firms to reduce penalties by improving emissions across their fleets or buying surplus credits from peers; those flexibilities were extended in April and fines eased after industry lobbying. Even so, the SMMT argues the market needs to reflect real consumer demand rather than being propped up by steep discounts. Government policy is a mixed picture. Ministers have backed EV uptake with measures such as a £1.3 billion grant scheme offering up to £3,750 towards purchase costs and increased spending on charge points. But last autumn’s announcement of a planned per-mile tax for electric cars has raised alarm in industry circles — the Office for Budget Responsibility estimates it could shave as many as 440,000 EV sales over five years. Not everyone sees the mandate as a problem. Environmental analysts point out that nearly one in four new cars being electric will help build a healthier second‑hand market, which is where most UK motorists buy their next car and where affordability gains would be felt. The picture, then, is of a market in transition: more EVs on the road, but at a substantial cost. The next steps — clearer, consistent signals from government and a mandate that matches genuine customer appetite — will determine whether growth continues without taxpayers and manufacturers footing an escalating bill. --- Managing your business finances? TaxAce provides smart online accountancy services for UK businesses with flexible monthly plans. Image and reporting: https://www.bbc.co.uk | Read original article