UK EV Market Growth Slows Amid Tax Plans

a { color: #880000 !important; background: #ffeeee !important; } Latest News from NourishThe Nourish Mission (formerly OneSub)Get answers to today's big questionsUK EV Market Growth Slows Amid Tax PlansBusiness > AutomotiveIn November 2025, UK battery electric vehicle (EV) registrations rose 3.6% year-on-year to 39,965, marking the weakest growth in nearly two years amid a 1.6% overall new car market decline. The government announced a £1.3bn extension of EV purchase grants and £200m for charging infrastructure, while planning a 3p-per-mile EV tax from 2028 to offset lost fuel duty revenue, sparking industry concerns about demand sustainability.

What's happened

In November 2025, UK battery electric vehicle (EV) registrations rose 3.6% year-on-year to 39,965, marking the weakest growth in nearly two years amid a 1.6% overall new car market decline. The government announced a £1.3bn extension of EV purchase grants and £200m for charging infrastructure, while planning a 3p-per-mile EV tax from 2028 to offset lost fuel duty revenue, sparking industry concerns about demand sustainability.

What's behind the headline?

EV Market Dynamics and Policy Tensions

Growth Slowdown Despite Record Shares: November 2025 saw a modest 3.6% increase in pure battery EV registrations, the smallest in nearly two years, contrasting with a 1.6% decline in overall new car sales. This signals a fragile EV market momentum.
Government Incentives vs. New Taxes: The UK government is expanding the Electric Car Grant by £1.3bn and adding £200m for charging infrastructure to encourage EV uptake. However, the planned 3p-per-mile tax on EVs from 2028 introduces a conflicting signal, potentially dampening consumer enthusiasm.
Industry Concerns: Automakers and industry bodies warn that new EV taxes could undermine demand just as manufacturers prepare to launch new models to meet stringent zero-emission mandates. Ford UK's managing director called the timing "not right," highlighting fragile demand.
Market Shifts and Competition: Tesla's UK registrations have fallen sharply amid competition from legacy and Chinese automakers like BYD, which is expanding aggressively with hybrid and EV models.
Infrastructure and Equity Challenges: Consumer Scotland advocates including EV ownership in the 2031 census to better plan charging infrastructure and ensure equitable access, especially for communities without off-street parking.
Policy Implications: The EV tax aims to recoup lost fuel duty revenue but risks slowing the transition to zero emissions. The government faces a balancing act between fiscal needs and climate goals.
Forecast: Without clear, consistent incentives, EV adoption growth will likely plateau or slow, complicating the UK's net-zero ambitions and automotive industry strategies.

What the papers say

Neil Lancefield in The Independent reports that November 2025 EV registrations rose by 3.6%, the smallest increase since a sharp fall in December 2023, with the Society of Motor Manufacturers and Traders (SMMT) highlighting a 5.5% decline in private buyer demand. Mike Hawes, SMMT CEO, cautioned that the upcoming EV tax could thwart government and industry ambitions. Reuters notes the EV market's third consecutive month above 50% market share but flags the weakest growth in two years, alongside the planned pay-per-mile tax announced by Finance Minister Rachel Reeves. The Guardian details the £1.3bn subsidy top-up and £200m for charging points, while warning that the proposed 3p-per-mile EV tax could add £276 annually to ownership costs, potentially stalling the market. Ford UK's Lisa Brankin warns the tax is "just another brake" amid fragile demand. Business Insider UK outlines broader industry challenges, including tariff impacts, supply chain issues, and automaker layoffs, with some firms pivoting back to hybrids and combustion engines. The Scotsman highlights calls from Consumer Scotland to include EV ownership in the 2031 census to better plan infrastructure and ensure fair access, especially in rural and island communities. Sky News and Reuters report on the government's Electric Car Grant success, helping over 35,000 drivers switch to EVs since July 2025, but also note Conservative criticism of the subsidies amid inflation and tax pressures. Together, these sources illustrate a UK EV market at a crossroads, balancing government incentives, emerging taxes, industry pressures, and infrastructure challenges.

How we got here

The UK government aims to phase out petrol and diesel car sales by 2030, promoting EV adoption through mandates requiring 28% zero-emission sales in 2025, rising to 80% by 2030. Despite record EV market shares, demand has recently stalled due to high upfront costs and policy uncertainty, prompting renewed subsidies and proposed new taxes to balance public finances.

Go deeper

How will the new EV pay-per-mile tax affect car buyers?
What incentives are in place to encourage EV adoption in the UK?
Why are Tesla's UK sales declining compared to competitors like BYD?

Common question

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