There was a slight decline in fleet and business new car registrations in October, with the Government warned planned tax change next April could damage new car sales.
There were 88,998 new cars registered to fleet and business in the month, a 0.4% decline on the 89,436 registered in October 2024.
Private registrations, meanwhile, grew by 2%, up to 55,950 units, according to new figures published today (Wednesday, November 5) by the Society of Motor Manufacturers and Traders (SMMT).
Year-to-date, it means that fleet and business registrations now stand at 1,050,468, a 3.5% uplift compared to the same period last year.
With the overall new car market now standing at 1.7 million units, fleet and business holds a 61% market share.
Electrified vehicles were the only powertrain technologies to record growth, largely driven by battery electric vehicle (BEV) uptake registrations, which rose by 23.6%, equivalent to 7,028 additional units.
As a result, BEVs took a 25.4% market share, the second highest recorded this year, although still short of the 28% target set by the zero emission vehicle (ZEV) mandate.
Plug-in hybrid vehicle (PHEV) uptake rose 27.2% to account for 12.1% of the market, while hybrid electric vehicles (HEV) posted growth of 2.1% to claim a 13.3% share.
Combined, electrified vehicles comprised the majority of new car registrations for the second consecutive month, with 50.8% of the market.
While October’s growth was more modest, year to date the overall BEV market is now up 28.9%, at 386,244 units – more than registered in the whole of 2024 – with two months still to go before the year ends.
BEVs now account for 22.4% of all new sales, thanks to massive manufacturer investment and, more recently, Government support through the electric car grant.
The latest quarterly industry outlook anticipates the overall new car market for 2025 will top two million units (2.012 million) for the first time since pre-pandemic 2019, with BEVs expected to account for 23.3% of uptake.
For 2026, the overall market is expected to reach 2.032 million units, a moderate improvement on the previous outlook, with the BEV outlook maintained at 28.2%.
While this would represent exceptional progress, says the SMMT, it would still fall short of mandated targets for 2026, which call for zero emission vehicles to comprise one in three new car registrations.
The gap is set to widen in 2027, with BEV share anticipated to hit 32.2% against a 38% target.
However, the SMMT argues that even this modest growth is at risk due to Government plans to end employee car ownership schemes (ECOS).
It intends to reclassify ECOS vehicles to make them liable for company car tax.
The Chancellor made the pledge in the last Autumn Budget, with any new rules due to take effect from April, 2026.
With around 100,000 cars supplied via ECOS a year – equivalent to around 5% of the annual new car market – such a step would depress growth and seriously impact the nearly-new and used markets, says the SMMT.
More than £1 billion in revenue would be lost to industry and 5,000 manufacturing jobs put at risk, while the Treasury would incur a £500 million hit from lost VAT and vehicle excise duty (VED) receipts.
Mike Hawes, SMMT chief executive, 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.”
Philip Nothard, insight director at Cox Automotive, said: “Despite October's slight growth, the market continues to tread choppy waters amid fragile consumer sentiment and policy uncertainty.
“These latest figures reveal that electric vehicle adoption is slowing, with just 22.4% year-to-date registrations.
“Looking ahead to 2026's 33% ZEV mandate target, this jump feels increasingly unrealistic. Without clear long-term incentives and consistent Government support, we risk undermining recovery and stalling momentum in the transition to zero-emission vehicles.”
Jon Lawes, managing director at vehicle leasing company, Novuna Vehicle Solutions, says that cost and charging remain the biggest barriers to mass EV adoption.
“While progress is being made, the transition is still fragile,” he explained.
“The UK is not yet on track to deliver the 300,000 public chargers needed by 2030, with access still heavily concentrated in London and the South-East. For the millions without driveways, charging remains far from straightforward — removing planning barriers to cross-pavement charging is a practical, common-sense step that would make it as easy as parking on your street.”
“Affordability is the other key hurdle. Extending grants to more models helps, but most buyers choose used cars, and that market is still overlooked.
“Without targeted incentives for used EVs and faster commercial charging, adoption across both cars and vans will continue to lag — with van decarbonisation struggling to meet the UK’s 16% ZEV target.”
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Gareth has more than 20 years’ experience as a journalist having started his career in local newspapers in the 1990s. Prior to joining Fleet News in 2008, he worked in the public sector as a media advisor and is currently news editor at Fleet News.
Government wants to end what it calls "contrived" schemes and "level the playing field" for company car drivers who pay benefit-in-kind tax.
John Messore, freelance tax expert on company cars, vans and fuel cards, examines the impact of Government plans to end ‘contrived’ ECOS schemes.
Six months on from the Treasury promising to end “contrived” ECOS, the industry is still waiting for details on the new rules.
The ending of employee car ownership schemes (ECOS) will negatively impact staff recruitment and retention for almost half (45%) of dealers.
Motor industry expert Martin Ward argues the Treasury’s targeting of employee car ownership schemes will have a negative impact on the car industry.
HMRC has published draft legislation to make vehicles supplied through employee car ownership schemes liable for company car tax.
As new figures reveal the impact of the JLR cyber attack, Government is warned to change its tax plans to avoid further damage to the sector.
Plug-in hybrids were the fastest growing powertrain, rising 56.4% to achieve a 12.2% market share in September.
The number of new light commercial vehicles (LCVs) registered in August was down by 13.3%, year-on-year, according to the latest figures from the SMMT.
Government targets for sales of new electric vehicles are expected to drive widespread pre-registration activity in the fourth quarter of 2025.
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