The UK electric vehicle (EV) market has achieved a record-breaking month of sales, with March 2025 witnessing the highest number of new EV registrations ever recorded. Approximately 68,000 battery electric vehicles (BEVs) were registered last month, marking a 38% year-on-year increase. This surge in EV sales reflects a continued upward trend in demand as consumers increasingly turn to electric vehicles, attracted by lower running costs, improved driving experiences, and a broader range of affordable options now available.
In what is shaping up to be a strong start for the UK’s EV market, the first quarter of 2025 closed with 21% of all new cars being electric, signifying a steady rise in the market share of BEVs. The continued expansion of hybrid and plug-in hybrid vehicles has also been notable, as petrol and diesel car registrations continue to decline. Petrol car sales dropped by 25% in Q1 compared to the same period in 2024, while diesel registrations fell by 15%, now representing just 5.5% of all new car sales in the UK.
Tesla Struggles as European Brands Gain Ground
Despite the overall rise in EV sales, one significant trend observed in March was the stagnation of Tesla’s sales in the UK. The American EV giant saw no growth in its registrations compared to the same month in 2024. While Tesla remains the UK’s leading electric car brand, its market share has been eroded by the growing success of European manufacturers such as Volkswagen.
Tesla’s challenges come amid a broader shift in the market towards a wider variety of electric vehicles from established carmakers. Volkswagen, for instance, has capitalised on this shift, increasing its market share with a diverse range of BEVs. Despite the slump in Tesla’s growth, the company continues to hold the top spot in terms of total UK EV sales. However, it faces increasing competition from a growing number of brands offering more affordable options, including mass-market models from the likes of Kia, Hyundai, and Volkswagen.
This shift in market dynamics highlights a broader trend towards greater choice in the EV sector. With more models available at a range of price points, consumers now have more options to choose from, making electric vehicles more accessible than ever before.
Prices Drop, Sales Rise: A Positive Feedback Loop
One of the key factors driving the strong sales growth in the EV market is the significant decrease in EV prices. Electric vehicles, once viewed as premium products, have gradually become more affordable over the past few years, thanks to increased competition and advancements in battery technology. This shift has allowed more consumers to consider EVs as a viable option, with the cost of entry for some models now lower than ever before.
As prices continue to fall, demand for electric vehicles has increased, further supporting the growth of the market. Many consumers are attracted not only by the lower purchase prices, but also by the long-term savings associated with owning an EV, such as reduced fuel costs and lower maintenance expenses. These savings, combined with government incentives for EV buyers, have made electric cars an increasingly attractive option for budget-conscious motorists.
The shift in pricing is especially evident in the growing number of smaller, more affordable electric vehicles now available on the market. Cars such as the Kia e-Niro and the Volkswagen ID.3 offer a more economical entry point into the electric vehicle world, and their popularity is evident in the latest registration data.
The Impact of the UK's Zero Emissions Vehicle Mandate
The strong growth in the UK’s electric vehicle market has been partly driven by the government’s Zero Emissions Vehicle (ZEV) mandate. This policy, which requires car manufacturers to meet a 28% BEV sales target for 2025, has played a pivotal role in encouraging carmakers to ramp up their electric vehicle offerings. New AutoMotive’s latest analysis suggests that carmakers are on track to meet the target, with some brands already achieving compliance.
Volkswagen, the UK’s largest car seller, has already met the BEV target for 2025, while BMW is also in a position to exceed its required sales quotas. The ZEV mandate has been an essential factor in accelerating the transition to electric vehicles, and experts believe it will continue to drive sales growth in the years ahead.
Although there have been discussions around the potential impact of new tariffs on trade with the US, experts believe these are unlikely to significantly affect the UK’s EV market. This is due to the relatively small number of EVs imported from the US and the limited volume of UK-made EVs exported to the US.
Challenges and Concerns
While the growth of the EV market is generally viewed as positive, there are still concerns that could hinder further progress. One such concern is the impact of the Vehicle Excise Duty (VED) changes that came into effect on April 1, 2025. The introduction of a “luxury car tax,” which applies to cars priced over £40,000, has been criticised for disproportionately affecting electric vehicles, many of which now fall into this price range.
Ginny Buckley, CEO of Electrifying, a UK electric car advice site, pointed out that the £40,000 threshold for the VED has not been updated in eight years and no longer reflects the reality of today’s EV market. She argued that this tax could discourage potential buyers of more affordable electric vehicles, such as the Kia e-Niro or the Volkswagen ID.3, which have become more popular but still fall under this tax bracket.
Looking Ahead
The figures for March 2025 suggest that the UK is on track to cement its position as Europe’s leading market for battery electric vehicles. Sales growth is expected to continue throughout the year, with an increasing variety of affordable models entering the market. As the price of EVs continues to fall, it is likely that more consumers will consider making the switch to electric, while traditional petrol and diesel vehicles will continue to decline in popularity.
With the UK’s ZEV mandate providing a strong framework for the transition to cleaner vehicles, the future of the electric vehicle market looks increasingly promising. However, as industry leaders continue to push for further incentives and a review of outdated policies like the luxury car tax, the next phase of the EV revolution in the UK will depend on the government’s ability to support the growing demand for affordable, zero-emission cars.
In conclusion, March 2025 has been a landmark month for the UK’s electric vehicle market, with sales up 38% compared to the previous year. Tesla’s dominance may be waning as European brands gain ground, but the overall picture for electric cars remains positive. With lower prices and a growing range of models, the future of EVs in the UK looks increasingly bright.
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