The automotive industry is raising concerns about the affordability of transitioning to electric vehicles. Nearly 500,000 electric cars sold in 2025, representing approximately 23.4% of the market. This growth follows a broader recovery in vehicle registrations, with over 2 million new cars registered in the UK last year—the highest figure since the pandemic disrupted the market.
Industry leaders acknowledge this progress but highlight underlying challenges. The Society of Motor Manufacturers and Traders notes that electric vehicle market share remains below the government’s 28% target. Manufacturers are absorbing substantial costs to encourage purchases, with discounts totaling more than £5 billion annually. This equates to approximately £11,000 in subsidies per electric vehicle sold.
The Zero Emission Vehicles Mandate requires carmakers to meet escalating targets or face penalties. Targets are set to increase to 33% in 2026, creating pressure on manufacturers to accelerate electric vehicle sales. Regulatory flexibilities introduced in April allow companies to avoid fines through alternative compliance methods, including emissions credits and fleet efficiency improvements. However, industry executives argue these measures may not suffice.
Concerns center on the sustainability of current pricing strategies. Heavy discounting masks weak consumer demand, according to industry representatives. They point to rising energy costs and increased raw material expenses as significant factors affecting profitability. A formal review of the mandate was scheduled for 2027, but industry groups are requesting an earlier evaluation to assess whether targets align with genuine market conditions.
Environmental advocates present a contrasting perspective. They highlight benefits extending beyond immediate sales figures, including opportunities in the second-hand vehicle market and reduced living costs for consumers. Government support programs, including grants and charging infrastructure investment, complement the regulatory framework. However, proposed taxation on electric vehicles threatens to undermine these initiatives by potentially reducing sales by approximately 440,000 units over five years.
