UK new car sales dip in July amid EV grant uncertainty

The UK new car market experienced a slowdown in July, with registrations falling by 5.0% to 140,154 units, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT).

This performance marks the weakest July since 2022 and is 10.8% lower than pre-pandemic levels in 2019, highlighting ongoing market volatility.

Demand from both private and fleet buyers saw declines, dropping by 3.2% and 6.5% respectively. While petrol and diesel car deliveries fell by 14.0%, they still accounted for more than half (53.0%) of the market share in July.

Bucking the overall downward trend, registrations of plug-in hybrid electric vehicles (PHEVs) rose by a significant 33.0%. Battery electric vehicles (BEVs) also saw growth, increasing by 9.1%. However, this BEV growth is modest compared to the 34.6% increase recorded in the first half of 2025, making July the second weakest month for BEV growth this year.

A key factor contributing to this modest EV uptake is the uncertainty surrounding the recently announced Electric Car Grant (ECG). While the £3,750 grant is a welcome incentive, full model eligibility has yet to be confirmed, causing some potential buyers to delay purchases. The BEV market share has now reached 21.3%, still falling short of the 28% target mandated by the Zero Emission Vehicle (ZEV) Mandate.

Mike Hawes, SMMT Chief Executive, commented on the figures:

“July’s dip shows yet again the new car market’s sensitivity to external factors, and the pressing need for consumer certainty.”

“Confirming which models qualify for the new EV grant, alongside compelling manufacturer discounts on a huge choice of exciting new vehicles, should send a strong signal to buyers that now is the time to switch.”

Hawes concluded that such certainty would drive increased demand for the remainder of the year and into next, benefiting the industry, consumers and helping to meet environmental goals.