Registrations of new cars stalled in July as many drivers delayed purchases of electric vehicles (EVs) until Government grants are rolled out.
The Society of Motor Manufacturers and Traders (SMMT) said 140,154 new cars were registered last month, down 5% from 147,517 during July 2024.
Battery electric vehicles (Bevs) held a 21.3% share of the new car market last month.
At least 28% of new cars sold by each manufacturer in the UK this year are required to be zero emission – which generally means pure electric – under the Government’s zero emission vehicle mandate.
The first electric car models eligible for new Government grants were announced on Tuesday.
Drivers will be able to save £1,500 with the purchase of new Citroen e-C3, e-C4, e-C5 and e-Berlingo cars.
These are the first models approved under the new £650 million electric car grant.
The scheme will enable motorists purchasing a new electric car to save either £1,500 or £3,750, depending on the vehicle’s sustainability.
SMMT chief executive Mike Hawes said: “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.
“That would mean increased demand for the rest of this year and into next, which is good news for the industry, car buyers and our environmental ambitions.”
The SMMT slightly upgraded its forecast for full-year new car registrations, to 1.9 million.
Registrations in 2024 reached 1.95 million.
Bevs are forecast to hold a full-year market share of 23.8%.
Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said the grant has provided a “much-needed boost” for consumer interest in new electric cars, with EV consideration up 10 percentage points on Auto Trader.
But the unveiling of the initiative on July 14 explains why it was a “slow” month for sales as buyers “wait to see just which models will get what level of grant”.
He added that discounts – either through the grant or by brands cutting prices themselves – will “trickle through to EV sales in the coming months”.
Dan Caesar, boss of lobby group Electric Vehicles UK, said it is “testament to consistent consumer interest” in EVs that one in five new car sales is fully electric, “especially given that some car shoppers will have paused their purchases until there’s more clarity about the electric car grant”.
John Lewis, chief executive of EV charging company char.gy, said the transition to electric motoring is “clearly gaining pace” but warned this increases the need to “ensure fair and convenient access to charging”, particularly for the 40% of drivers without off-street parking at home.
