Car sales in the UK climbed above two million vehicles in 2025, reaching the milestone for the first time since before the Covid-19 pandemic. The growth was largely driven by the rapid rise of Chinese car brands, especially in the electric vehicle (EV) market, according to early industry data.
Figures from the Society of Motor Manufacturers and Traders (SMMT) show that around 2 million new cars were registered last year, marking a clear recovery after several difficult years for the automotive industry.
Chinese Brands Take a Bigger Share of the UK Market
Chinese manufacturers made up nearly 10% of all new car sales in the UK, accounting for about 196,000 vehicles in 2025. This represents a sharp increase from less than 5% in 2024, showing how quickly these brands are gaining acceptance among British buyers.
Popular Chinese-owned brands such as MG, BYD, Chery, Omoda, and Jaecoo have expanded rapidly by offering competitively priced electric and hybrid cars. MG remained the strongest performer, selling around 85,000 vehicles, while BYD and Chery recorded the fastest growth, with sales multiplying several times compared to the previous year.
The UK has become an attractive market for Chinese manufacturers because, unlike the US and European Union, it has not introduced import tariffs on Chinese-built vehicles.
Electric Car Sales Reach Record Levels
Electric vehicle sales continued to grow strongly in 2025. Nearly 473,000 electric cars were sold, an increase of almost 25% year on year. Battery electric vehicles now make up 23.4% of all new car registrations, helping to reduce average emissions from new vehicles by around 10% compared with last year.
SMMT chief executive Mike Hawes described the results as “a reasonably solid performance” despite ongoing economic uncertainty, high living costs, and global geopolitical pressures.
Challenges for Traditional Carmakers
While Chinese brands surged ahead, several established manufacturers struggled to keep pace. Japanese brands such as Toyota, Nissan, Suzuki, and Honda saw declines in market share. Some European manufacturers, including Citroën, Fiat, and Seat, also experienced lower sales.
The rapid growth of Chinese electric and hybrid models has added pressure on European and Japanese carmakers as they try to meet the UK’s Zero Emission Vehicle (ZEV) mandate, which sets strict targets for electric car sales.
ZEV Mandate and Industry Pressure
The ZEV rules aim for 28% of new car sales to be fully electric in 2025, but industry leaders warn the target remains difficult to achieve without heavy discounts. According to the SMMT, manufacturers are offering average discounts of up to £11,000 per electric car, costing the industry an estimated £5.5 billion in total.
To cope with the pressure, many manufacturers have increased sales of plug-in hybrid vehicles (PHEVs), which rose by about one-third last year. These vehicles are often more profitable and help companies meet emissions targets more easily.
Government Policy and Consumer Concerns
The UK government has already softened some ZEV rules by introducing flexibilities and loopholes, allowing manufacturers to avoid fines. Industry analysts believe the sector likely avoided penalties for the second year in a row.
However, uncertainty remains over future demand for electric cars. A proposed pay-per-mile charge for electric vehicles, announced for introduction in 2028, has raised concerns among consumers. While the government continues to offer EV grants, industry leaders say mixed messages could slow adoption.
What This Means for UK Car Buyers
For consumers, increased competition—especially from Chinese brands—has led to more choice, better technology, and lower prices, particularly in the electric car segment. Analysts expect competition to intensify further in 2026 as more models enter the market.
Despite challenges, industry leaders say the UK car market is on a steady recovery path, with electric and hybrid vehicles playing a central role in its future.
