Automotive industry records rebound from tax rises
May 5, 2026
The UK’s new car market grew by nearly a quarter last month as it displayed a “rebound” from tax rises, an industry body said.
Some 149,247 new cars were registered in April, the Society of Motor Manufacturers and Traders (SMMT) said.
That was a 24.0% increase from the same month last year.
Registrations in April 2025 were much lower than normal as many drivers had brought purchases forward to the previous month to avoid incoming tax increases.
The exemption from vehicle excise duty (VED) for zero and low-emission vehicles was scrapped on April 1 last year.
This meant EVs with a list price exceeding £40,000 were affected by the luxury car tax for the first time, at an annual cost of £425 on top of the standard rate of VED.
Growth in April was recorded across all sectors, but was led by purchases for fleets owned or leased by businesses or other organisations (up 26.8%).
Private retail registrations increased by 20.2%, while the smaller business sector saw a 15.0% uptick.
The market share of pure battery electric new cars was 26.2%, up from 20.4% a year ago, after registrations grew by 59.1% year on year.
The SMMT said in April the two millionth car of that type was registered in the UK.
Mike Hawes, SMMT chief executive, said: “April’s rebound is welcome, but underlines just how significantly fiscal changes can influence the market.
“Two million electric car registrations is a considerable milestone to celebrate, although natural demand is still well below the level demanded by the mandate.
“The mounting cost of compliance threatens to limit consumer choice, overall decarbonisation and the sector’s competitiveness so the need for a rapid review of the transition to align policy with market realities is unchanged, else Britain’s attractiveness as a vehicle market and manufacturing hub will be put at risk.”
The zero-emissions vehicle (Zev) mandate sets a headline target for the proportion of new cars sold by each manufacturer that are zero-emission, which generally means pure battery electric.
This year the level is 33% for cars, although manufacturers are able to comply using flexibilities such as selling high volumes of plug-in hybrids.
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