In May 2025, UK new car registrations rose by 1.6% to 150,000 units, with all-electric vehicles (EVs) making up 32,000 of those sales—a 25% jump from the same month last year. However, Tesla, a former EV market leader, saw its sales plummet by 36% to 2,000 vehicles, amid challenges with its next-generation Modell Y, according to a recent report by Die Zeit.

EV Market Share Grows as Petrol and Diesel Fade

The UK’s EV sector is gaining momentum, with pure electric cars capturing 21.8% of the market in May 2025. For the first five months of the year, EVs held a 20.9% share, falling short of the government’s 28% zero-emission vehicle mandate target.

Including plug-in hybrids and petrol-electric hybrids, electrified vehicles accounted for 47.3% of all registrations last month. Meanwhile, petrol car sales dropped 12.5% year-on-year to 71,000 units, representing 47.5% of the market, while diesel sales fell 15.5% to 7,900 units, just 5.2% of total registrations.

This shift reflects a broader trend: UK consumers and manufacturers are pivoting toward electrification, driven by regulatory pressures and market demand. However, the Society of Motor Manufacturers and Traders (SMMT) warns that the industry faces “brittle consumer confidence and economic turbulence,” which could hinder further growth.

Tesla’s Struggles Contrast with BYD’s Rise

Tesla’s 36% sales drop in May—to 2,000 vehicles—marks a steep decline, with year-to-date sales down nearly 8% at 15,000 units. The company attributes this to production hiccups with its next-generation Model Y, a critical model in its lineup. Some industry observers, however, point to the polarizing public image of Tesla’s CEO, Elon Musk, as a contributing factor.

In stark contrast, Chinese EV manufacturer BYD is accelerating its UK presence. BYD sold 3,000 vehicles in May alone, with a year-to-date total of 14,800 units—an impressive leap from the 8,700 vehicles it sold in the UK throughout all of 2024. BYD’s success underscores the competitive pressure Tesla faces as new players capitalize on the growing demand for affordable EVs.

Industry Faces Economic and Regulatory Challenges

The SMMT highlighted broader concerns for the UK auto industry. Mike Hawes, SMMT’s chief executive, noted, “A return to growth for new car registrations in May is welcome, but manufacturers discounting on new products continues to underpin the market, notably for electric vehicles.” This discounting reflects economic strain, as manufacturers slash prices to move inventory amid sluggish demand.

The industry is also bracing for the upcoming government spending review, hoping for fiscal measures like VAT reductions to machen. EVs more financially attractive. Current market dynamics suggest that without such support, manufacturers risk missing the government’s zero-emission targets, potentially facing fines or production cuts.

What This Means for EV Owners and Enthusiasts

For EV owners and enthusiasts, the UK market in 2025 offers a mixed outlook. The rise in EV sales signals growing acceptance, with more charging infrastructure and model options—like BYD’s expanding lineup—becoming available. However, Tesla’s struggles with the Model Y could delay updates that owners have been anticipating, such as improved range or battery efficiency.

Economically, the discounting trend may benefit buyers in the short term, with EVs becoming more affordable. Yet, as Die Zeit report notes, “This cannot be sustained indefinitely as it undermines the ability of companies to invest in new product development: investments which are integral to the decarbonisation of all road transport.” Without sustained investment, the pace of EV innovation could slow, impacting long-term adoption and the UK’s net-zero goals.

As the EV landscape evolves, consumers can expect a more competitive market, but the industry’s ability to balance economic pressures with innovation will be key to sustaining this growth.