Introduction to the UK's Electric Car Market

The UK's transition to electric cars has faced a new setback, as a survey by the Society of Motor Manufacturers and Traders (SMMT) revealed that nearly half of prospective new-car buyers would not consider purchasing an electric vehicle, even if the government offered financial incentives.

Despite electric cars accounting for roughly 23% of new car sales in the first couple of months of 2025, the survey suggests that this growth may not be sustainable. The SMMT believes that government incentives, such as cuts in VAT on new electric car purchases and public EV charging, could be crucial in driving sales and meeting the UK's Zero Emission Vehicle (ZEV) mandate targets.

Challenges Facing the Electric Car Market

The survey found that three in five respondents who said they would not choose an electric car stated that they still wouldn't opt for one, even if the government brought back financial incentives. Additionally, nearly one-in-two respondents who said they would buy a new electric car already own an EV, suggesting that future sales may be driven by existing EV adopters rather than new converts.

The SMMT is calling for government support to stimulate sales, including cuts in VAT on new electric cars and public EV charging. The trade body also wants the government to raise the threshold for models to fall under the expensive car supplement, which currently sits at £410, on top of the £195 annual Vehicle Excise Duty (VED).

Industry Reaction and Future Outlook

SMMT CEO Mike Hawes noted that the current discounts offered by manufacturers to meet ZEV mandate targets are unsustainable, with car makers spending £4.5 billion on discounts in 2024. Hawes emphasized the need for government incentives to drive sales and meet the UK's climate goals.

The government is set to announce the outcome of its review into the ZEV mandate, which could relieve pressure on manufacturers to sell electric cars to a relatively uninterested market. The SMMT and industry leaders are eagerly awaiting the government's decision, which will have significant implications for the UK's electric car market.