The British automotive sector experienced significant growth in 2025, with new car registrations climbing above two million for the first time since before the COVID-19 pandemic. According to data released by the Society of Motor Manufacturers and Traders (SMMT), manufacturers registered 2,020,520 vehicles throughout the year - a 3.5% increase compared to 2024. This achievement represents the strongest performance since 2019, signalling a robust recovery across all sales channels, including private buyers, fleet operators, and business purchases.
The Fuel Type Landscape: A Changing Market
Traditional petrol and diesel vehicles maintained their dominance in 2025, collectively accounting for just over half of all new registrations at 51.6%. However, this milestone likely marks the final year that internal combustion engines will lead the market. The real growth story emerged in the plug-in hybrid segment, which surged by 34.7% - the fastest-growing fuel category. Chinese manufacturers played a crucial role in this expansion, with models like the BYD Seal U, Jaecoo 7 PHEV, and MG HS PHEV representing 21% of all plug-in hybrid sales.
Electric Vehicles: Progress and Challenges
Electric car sales reached record numbers in 2025, with 473,348 units registered - a 23.9% increase that captured 23.43% of the total market. Despite this impressive growth, the sector fell short of government targets. The ZEV Mandate required manufacturers to achieve a 28% electric vehicle sales mix, a goal that remained elusive throughout most of the year. Only December surpassed this threshold, when manufacturers aggressively promoted electric incentives while delaying conventional vehicle registrations.
The reintroduction of EV grants provided limited relief to consumers, with the maximum £3,750 discount available on only a handful of models. Manufacturers have absorbed substantial costs to drive demand, subsidising each electric vehicle by an average of £11,000. Industry experts worry that the early announcement of the planned "pay-per-mile" scheme for 2028 sends confusing signals to potential buyers considering the switch to electric vehicles.
The Chinese Automotive Invasion
Perhaps the most significant development in 2025 was the unprecedented expansion of Chinese car manufacturers into the UK market. Five new brands - Changan, Chery, Geely, Leapmotor, and Xpeng - entered the market during the year, capitalising on the UK's open trade stance compared to stricter European tariffs. Chinese manufacturers now represent nearly one in every ten new cars registered in Britain, a figure that doesn't even include Chinese-built models like the electric Mini Cooper, Mini Aceman, and Polestar vehicles. This expansion has contributed to broader UK electric vehicle market trends, reflecting the growing adoption of electric and alternative-fuel vehicles across the UK automotive landscape.
The Best-Selling Models: Tradition Prevails
Despite the electric revolution gaining momentum, traditional vehicles dominated the best-seller rankings. The Ford Puma maintained its crown as the UK's favourite car for the third consecutive year, with 55,488 registrations - an increase of 7,000 units aided by the introduction of the electric Puma Gen-E variant. Notably, this electric model represented the only fully electric vehicle in the top ten best-sellers list, with all other positions held by combustion engine or hybrid alternatives.
The Kia Sportage secured second place with 47,788 sales, benefiting from a mid-year facelift, while the Nissan Qashqai claimed third position with 41,141 registrations. The Vauxhall Corsa made a remarkable comeback, climbing from outside the top ten to fourth place with 35,947 sales, followed by the Nissan Juke hybrid in fifth with 34,773 registrations.
Electric Vehicle Leaders
Tesla maintained its commanding position in the electric vehicle segment despite facing intensified competition and controversy surrounding its leadership. The Model Y topped the EV rankings with 24,298 registrations, followed closely by the Model 3 with 21,188 sales. However, Model Y registrations declined by 8,000 units compared to 2024, signalling emerging market pressures.
Audi's electric offerings performed strongly, with the Q4 e-tron (14,433 sales) and Q6 e-tron (13,148 sales) securing third and fourth positions respectively. The Ford Explorer rounded out the top five with 12,237 registrations, substantially outperforming the related Volkswagen ID.4, which failed to reach the top ten.
Manufacturer Performance: Winners and Shifts
Volkswagen solidified its position as Britain's leading automotive brand with 178,607 sales - an increase of 13,000 vehicles compared to the previous year. BMW held second place with 122,723 registrations, marginally declining year-on-year.
Ford experienced remarkable growth, climbing from fifth to third position with 118,998 vehicles sold, driven by the continued success of the Puma and strong Explorer sales. Kia slipped to fourth place with 113,436 registrations despite marginal growth, while Audi dropped to fifth with 111,115 sales after enduring a disappointing year with registrations down 9.24%.
Hyundai demonstrated strong momentum, jumping positions with 93,124 sales, reflecting the broader shift in market dynamics as manufacturers adapt to evolving consumer preferences and regulatory pressures shaping the automotive industry's future.