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Registrations of new cars grew by 0.5% last month, figures show.
Some 144,948 new cars were registered in October, the Society of Motor Manufacturers and Traders (SMMT) said.
The figure compares with 144,288 during the same month in 2024.
Battery electric vehicles held a 25.4% share of the new car market in October, which was the second highest monthly level this year.
Registrations of new petrol cars declined by 11.6%, with a market share of 44.4%, down from 50.5% a year earlier.
SMMT chief executive Mike Hawes warned about the impact of Government plans to make vehicles obtained through Employee Car Ownership Schemes (ECOS) liable for company car tax.
The policy is expected to lead to the closure of the schemes.
Mr Hawes said: “The Government has backed the UK automotive sector with EV incentives and global trade deals, helping drive growth and encourage decarbonisation.
“But scrapping ECOS would undermine that progress – penalising workers, reducing Exchequer income and putting green investment at risk.
“At a time when the Budget should fuel growth, the measure will do the exact opposite.
“It is time for a rethink.”
The SMMT issued an updated outlook which anticipates the new car market will reach 2.012 million units this year.
This would be the first time it has exceeded two million since before the coronavirus pandemic, in 2019.
Battery electric vehicles are forecast to secure a market share of 23.3% this year.
Under the Government’s zero-emission vehicle mandate, at least 28% of new cars sold by each manufacturer in the UK this year are required to be zero emission, which generally means pure electric.
Several flexibilities are available to manufacturers to avoid punishment for missing the target.
Ian Plummer, chief commercial officer at online vehicle marketplace Autotrader, said the introduction of Government grants for certain new electric cars is “clearly sparking demand”.
He went on: “It is now up to the Chancellor to avoid own goals on growth in this month’s Budget and encourage adoption by refusing to slap business rates on public chargers and resisting the temptation to scrap the Employee Car Ownership Scheme.”
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Tanya Sinclair, chief executive of lobby group Electric Vehicles UK, said: “Petrol sales are collapsing while electric vehicle sales continue to surge.
“Drivers have done their homework and they know there are more affordable models, better lease options and smarter charging choices than ever before.”
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