UK new-car registrations rose 11.7% in July as private, fleet, and business demand increased, while battery-electric models achieved their highest market share for the month.
Figures from the Society of Motor Manufacturers and Traders show that 156,571 new vehicles were registered, compared with 140,154 during July 2025. It was the market’s eighth consecutive month of growth and its strongest July performance since 2019.
Private registrations increased 12.6% to 58,137 vehicles, while fleet demand rose 9.5% to 93,734. Fleets continued to account for most of the market, representing 59.9% of registrations. The smaller business segment increased 61.3% to 4,700 vehicles.
Electrified powertrains generated much of the expansion. Battery-electric registrations climbed 44.5% to 43,106, lifting their share of the July market from 21.3% to 27.5%. Plug-in hybrids increased 33.6%, while conventional hybrid registrations rose 11.6%.
Petrol demand fell 5.2%, and diesel registrations declined 17.7%. Petrol nevertheless remained the largest single powertrain category, accounting for 40.1% of new cars during the month.
Across the first seven months of 2026, total registrations reached 1.29m, an increase of 9.5%. Battery-electric volume was 28.7% higher than a year earlier and represented 25.31% of the market.
The rate of growth has not eliminated the gap between registrations and regulatory targets. The SMMT’s latest outlook expects battery-electric cars to secure 27.4% of a 2.18m-unit market this year, below the 33% share required under the zero-emission vehicle mandate.
The industry body expects the battery-electric share to rise to 32.1% during 2027, compared with a regulatory target of 38%. Manufacturers can use flexibilities within the system, but persistent shortfalls increase the pressure to discount vehicles, alter the mix of cars supplied, or use credits to meet their obligations.
Mike Hawes, chief executive of the SMMT, said: “July’s record EV performance is a great achievement, reflecting industry’s huge investment in zero emission mobility.”
The increase in sales is being supported by extensive discounts, marketing expenditure, government incentives, and greater model availability. Sustained intervention can accelerate adoption, but it also affects manufacturer margins and the economics of future product launches.
Discounting can influence residual values. Lower used-car prices may increase the cost of lease and fleet-finance agreements because providers expect to recover less when vehicles are resold at the end of a contract.
Residual-value uncertainty is particularly important because fleets account for most new-car registrations. Leasing companies price contracts around an estimate of a vehicle’s future value, meaning rapid changes in used-car prices can affect monthly payments and willingness to fund particular models.
The market remains sensitive to changes in incentives. Demonstrator and courtesy cars lost eligibility for the Electric Car Grant during July, and those vehicles have represented around 10% of battery-electric registrations. The industry’s latest outlook was assembled before that eligibility change took full effect.
Debate over changes to the zero-emission vehicle mandate has created uncertainty for manufacturers, charging providers, fleet operators, and other businesses investing in the transition. A weaker target could reduce near-term compliance pressure, while frequent policy changes may make infrastructure and production decisions harder to plan.
The July data show that private buyers participated in the wider recovery rather than leaving growth entirely to large fleets. Fleets still dominate registrations, giving leasing companies and corporate procurement policies substantial influence over which powertrains enter the market.
Private buyers may face a different set of barriers from fleets. Access to home charging, confidence in public infrastructure, insurance premiums, upfront pricing, finance rates, and uncertainty about resale values can all influence whether a household selects a battery-electric vehicle.
Manufacturers are also balancing UK targets against production capacity, supply allocations, and regulatory requirements in other markets. A vehicle directed to Britain to support mandate compliance cannot be sold elsewhere, while aggressive UK pricing can create tension with dealers and customers in neighbouring markets.
The wider supply chain is affected by the pace and composition of demand. Dealers need staff capable of explaining charging and ownership costs, repair networks require suitable equipment and training, and energy providers must judge where additional charging capacity will be used.
The transition also changes working-capital requirements. Dealers may carry a larger range of powertrains and models while demand patterns remain uncertain, increasing the risk that vehicles require discounting before they are sold.
Electric-car adoption is advancing quickly in absolute terms, but statutory ambition is rising faster than the industry expects demand to develop. The cost of closing that gap remains unresolved, with manufacturers, consumers, finance providers, and government incentives each carrying part of the burden.
Further monthly gains would strengthen the market’s trajectory, but the full-year result will determine whether July represented a durable acceleration. The industry enters the second half with record electric volume alongside a regulatory shortfall that continues to shape pricing, production, and investment decisions.
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