EV registrations rose 44.5 per cent year on year in July, with demand driven by model choice, heavy discounting and government incentives.

The Society of Motor Manufacturers and Traders (SMMT) now expects 2.18 million new car registrations in 2026 with EVs claiming 27.4 per cent, but this is still significantly short of the 33 per cent ZEV Mandate target.

The rise is impressive, even if there was a sub-par July 2025, when some buyers delayed switching to electric until confirmation of full model eligibility for the Electric Car Grant (ECG).

In the longer term, EV share is expected to rise to 32.1 per cent in 2027 against a target of 38 per cent. This is despite an ever-expanding number of brands and models, manufacturer subsidies, government incentives and an ongoing backdrop of high fuel prices.

The outlook reflects manufacturer views submitted prior to the end of ECG eligibility for demonstrator and courtesy cars in mid-July. Given these vehicles currently account for around 10 per cent of EV registrations, and around four in ten EV registrations are delivered by ECG eligible models, the change could impact future performance.

While mandate flexibilities are helping bridge some of the gap between natural demand and ambition, they do not come without cost, and their value will diminish as targets accelerate. The shortfall continues to be addressed by significant discounting, marketing and other fiscal support from industry and government, costs which are causing manufacturers to pause or even divert investment, while weakening residual values, damaging profitability and costing jobs.

Mike Hawes, SMMT chief executive, commented: “July’s record EV performance is a great achievement, reflecting industry’s huge investment in zero emission mobility. But that progress cannot be sustained if manufacturers continue haemorrhaging billions in EV discounts, distorting demand to avoid even steeper penalties. The sector’s commitment to decarbonisation is not in doubt but its ability to remain viable, and attract investment for an EV future, is under intense pressure.”

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