Automotive sector quarterly update

New car registrations topped two million across the full year – the first time this milestone has been reached since the pandemic. This is the third consecutive year of growth for the sector, with final, full-year sales 3.5% higher than the year before. Despite this growth, overall sales of 2.02 million still remain below the 2.3 million figure achieved in 2019 and lag even further behind the record high of 2.69 million achieved just under a decade ago in 2016.

Performance across Q4 was mixed. October sales were flat (+0.5%) and November sales fell by 1.6%, while December sales picked up and achieved growth of 3.9% compared with the previous year. The fluctuation in performance across Q4 was likely linked to uncertainty among consumers in the run up to the 2025 Autumn Budget. Noticeably, demand among private buyers in November fell by a substantial 5.5% as individuals held back on major purchases ahead of the Budget.

Despite seeing a -8% decline in sales across the year, petrol-powered vehicles remained the most popular choice for consumers, accounting for 46% of all new cars sold in 2025. However, this figure is down by six percentage points compared with 2024 as sales of both battery electric and hybrid vehicles saw substantial growth. Battery electric vehicles (BEVs) accounted for more than one in five of all new cars sold in 2025, making them the second most preferred type of vehicle in the UK.
 

Electric vehicle outlook

Despite growth in the electric vehicle market in the last year, albeit still behind the government mandate, there is uncertainty among manufacturers regarding the regulation of EVs, and potential changes to the Zero Emission Vehicle target. Differing messages to consumers around affordability, and changes to EV legislation, will also play a part in more cautious adoption of plug-ins. 

Indeed, Deloitte’s 2026 Global Automotive Consumer Study found that only one in ten (11%) UK consumers would choose to go fully electric with a battery electric vehicle (BEV), up from 8% in 2025. However, among consumers planning to buy a new vehicle, this rises to 19%, compared to 5% targeting the used market.

Elsewhere, a quarter (27%) would opt for a hybrid electric vehicle (HEV), and one in ten (11%) for a plug-in hybrid (PHEV). When combined with those who would choose to go fully electric, half (49%) of UK consumers would prefer their next vehicle to be electrified. The new car market remains more popular than the used one, with 28% preferring a new HEV and 15% preferring a new PHEV, compared to 26% and 9%, respectively.

The main reason for UK consumers choosing an electric vehicle (EV) as their next vehicle is lower fuel costs (50%), followed by environmental concerns (39%) and the driving experience (34%).
 

Cost and lack of charging infrastructure remain barriers to EV adoption

Almost half (45%) of UK consumers name cost as one of the top concerns regarding BEVs. Other major concerns include driving range (48%), time required to charge (43%) and the cost of replacing batteries (38%).

More than three-quarters (79%) of UK consumers intending to acquire a BEV or PHEV as their next vehicle expect to charge it at home, with only 12% stating they would charge it on-street or at a public charging station. However, of those intending to go electric, over half (52%) do not have EV charger access at home. Meanwhile, a lack of public EV charging infrastructure (37%) and a lack of a charger at home (35%) are major concerns for UK drivers.

Market analysis suggests that investment into charging may be slowing, leaving a crucial gap in the development of infrastructure needed to boost EV uptake. Continued investment and development in charging infrastructure, along with greater clarity for both consumers and manufacturers, will be crucial in driving further uptake. 

Outlook for Q1 2026

Data from the Deloitte Consumer Tracker shows that the percentage of consumers planning to buy a new car in Q1 2026 rose by 0.7 percentage points to 6.4%. This slight uptick presents a counter narrative to wider consumer attitudes towards major purchases. However, there may be an element of seasonality, with March regularly driving the highest new car sales of the year due to the introduction of new plates. 

Despite ongoing uncertainty around the transition to electric, it is expected that BEV sales as a proportion of the total market will continue to grow in 2026. New electric brands are entering the UK market, and at pace. The UK consumer is showing less loyalty than those across many other geographies, creating an opportunity for challenger brands to enter the market and capture a share for themselves. This should encourage all players to look at how they can differentiate and target consumer priorities to capture and retain a longer-term, loyal customer base.

UK consumers demonstrate one of the lowest brand loyalties across all geographies when purchasing cars, with only 39% purchasing their current vehicle from the same brand as their previous vehicle. Instead, UK consumers say product quality (60%), vehicle performance (54%), and price (52%) are the most important factors when deciding the brand of their next vehicle.