UK New Car Sales Surge with EV Discounts Driving Demand

UK new car sales rose in May 2025, with electric vehicles (EVs) leading the charge thanks to heavy discounts, according to Reuters. Total registrations climbed 1.6% year-over-year to 150,070 units, marking the best May performance since 2021.

EV Discounts Fuel Market Recovery

According to the Society of Motor Manufacturers and Traders (SMMT), in May, electric vehicles (EVs) made up more than 47% of all car sales, while battery electric vehicle (BEV) sales soared by 25.8% compared to the previous year.

Chinese EV makers, rapidly expanding in Europe, have offered steep discounts, sparking an intense price war that has squeezed profit margins for other automakers. Meanwhile, Tesla saw a 36.04% decline in UK sales, delivering just 2,016 vehicles, while research group New AutoMotive reported a sharper 45% drop for the automaker.

Industry Challenges and Consumer Trends

The auto sector faces ongoing hurdles, including supply chain disruptions and stiff competition. “A return to growth for new car registrations in May is welcome but manufacturer discounting on new products continues to underpin the market, notably for electric vehicles,” said SMMT Chief Mike Hawes.

This discounting reflects broader pressures, such as uncertain global trade and the costly shift from internal combustion engines to EVs.

“The continued rise in EV registrations shows a growing consumer appetite for sustainable transport, further fuelled by the government’s recent announcement to remove the need for planning applications for home EV charging installations,” said Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte.

What’s Next for the EV Market?

The surge in EV sales highlights a shift toward greener transport, but the price war raises questions about long-term profitability for manufacturers. As competition intensifies, automakers may need to innovate with more efficient battery technologies or expand charging infrastructure to maintain momentum.

Photo courtesy of BYD and Tesla.