Currently reading: New car sales dip in July as buyers await clarity on electric car grant

Industry expects demand to pick up as more EVs are declared eligible for the ECG

The UK registered 5% fewer cars in July than in the same month last year, as the EV market stalled while buyers awaited clarity on which electric cars will be eligible for new government grants. 

Some 140,000 new cars were registered last month, a dip that ended a two-month period of growth, but the industry is optimistic that the announcement of new government- and manufacturer-backed discounts for EVs will accelerate uptake and drive an increase in sales, and it is now expected the UK will register 1.9 million cars in 2025. 

Growth in electric car sales slowed dramatically in July as customers waited to see which cars would be eligible for the government's new Electric Car Grant (ECG), which will reduce the price of some sub-£37k EVs by either £1500 or £3750, according to various criteria.

Registrations of pure-EVs were up 9.1% in July compared with the same month last year, to 29,825 units. That's significantly down on the 34.6% uptick in demand recorded over the first half of 2025 and made it the second weakest month of the year so far for EV registrations after April, when changes to car tax rules "distorted the market", according to the Society of Motor Manufacturers and Traders (SMMT).

News of the latest car sales figures, though, comes on the same day that the government has confirmed the first EVs eligible for the ECG will be Citroën's ë-C3, ë-C3 Aircross, ë-C4, ë-C4 X, ë-Berlingo and new ë-C5 Aircross - each eligible for the lower of the two discounts and so now £1500 cheaper at the point of sale. 

The SMMT says further clarity on the models eligible for the grant, expected over the coming weeks, will be crucial as EV sales are still lagging well behind the trajectory of the zero-emission vehicle (ZEV) mandate. Currently, battery-electric vehicles (BEVs) hold a 21.3% market share, which is well behind the 28% EV mix manufacturers must achieve in 2025, "demonstrating the importance of accelerating uptake over the remainder of the year", said the SMMT.

However, as consumers await further confirmation of which cars and manufacturers will attract the ECG – a decision that hinges largely on the emissions of the country of manufacture – many brands have already started to slash prices themselves in a bid to shift EVs.

Alfa Romeo, MG, Volvo and Smart, for example, are among the makers who have applied £1500 discounts to some of their sub-£37k EVs, while cars including the Leapmotor C10, Hyundai Inster and GWM Ora 03 are now available with up to £3750 off. 

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SMMT boss Mike Hawes said July's figures lay bare "the new car market's sensitivity to external factors and the pressing need for consumer certainty". 

He added: "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.” 

July's EV decline is "expected to be temporary", said the SMMT, forecasting that EVs will account for 23.8% of the UK's forecasted 1.9 million new cars at the end of the year.

Elsewhere, sales of hybrids were down 10%, diesel's decline continued with another 7.9% drop – to just 8000 cars in July – and there was a 14.7% decrease in sales of pure-petrol cars, which accounted for 66,271 sales. Nevertheless, pure-combustion powertrains still make up more than half of the new car market.

Plug-in hybrids, meanwhile, are seeing something of a renaissance, with registrations up 33% to 17,489 - giving them an eighth of the UK market, and setting them on course to likely overtake other hybrids in the coming months. 

There was a small uptick in business registrations, but as these accounted for fewer than 3000 cars in July, it was far outweighed by 3.2% and 6.5% dips in private and fleet registrations, respectively. 

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Felix Page

Felix Page
Title: Deputy editor

Felix is Autocar's deputy editor, responsible for leading the brand's agenda-shaping coverage across all facets of the global automotive industry - both in print and online.

He has interviewed the most powerful and widely respected people in motoring, covered the reveals and launches of today's most important cars, and broken some of the biggest automotive stories of the last few years. 

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