According to forecasts from DriveElectric, electric car sales in the UK are expected to reach 440,000 units in 2025, accounting for 24% of the total 1.84 million new car sales. This marks a 4.4% increase from 2024 when electric cars took 19.6% of the market.
Despite this growth, the forecast suggests that the sales share will fall short of the government’s Zero-Emission Vehicle (ZEV) mandate target of 28%. Positive factors contributing to the increase include introducing more affordable and diverse EV models, reduced battery costs, and improved driving range and charging speed, which help alleviate range anxiety.
The UK’s charging network is also expanding, especially with more rapid chargers, boosting consumer confidence. Additionally, businesses benefit from low benefit-in-kind (BIK) tax rates, currently at 2% and set to rise gradually. This has made salary sacrifice schemes popular, potentially reducing EV costs by up to 40% for employees. Companies are increasingly motivated to electrify their fleets to meet carbon emission reduction goals, which can enhance their business prospects.
Financial incentives exist for businesses and fleets to transition to electric vehicles (EVs), but private motorists do not have similar support, which could hinder retail EV sales.
DriveElectric forecasts 1.84 million total car sales in the UK by 2025, slightly below other estimates. This trend is driven by some manufacturers reducing petrol and diesel vehicle sales to meet Zero-Emission Vehicle (ZEV) mandate targets,a trend that began in 2024.
Adam Kemp, Partnerships Director at DriveElectric, notes, “We expect electric car sales to rise by just over 4% compared to 2024, reaching 24% of the new car market. However, this still falls short of the 28% ZEV target for 2025.”
This shortfall is contributed to by the lack of financial incentives for private motorists despite EVs’ lower overall costs.
DriveElectric uses market data to forecast EV registrations. In January 2024, it accurately predicted that EV sales would be about 19% of the total market, matching later revised industry figures.
While some manufacturers, like Tesla, may meet the 28% target for 2025, others are unlikely to do so due to insufficient EV models, and demand from private motorists remains lower than from businesses and fleets.
Significant fines of £15,000 per vehicle apply for those that fail to meet the zero-emission requirements within the ZEV mandates’ 28% allocation. However, manufacturers can offset a shortfall in electric vehicle (EV) sales by selling low-emission petrol and diesel cars, which could contribute an additional 3% to industry figures in 2024.
Electric vehicles are essential for the UK to meet its net-zero greenhouse gas targets and improve air quality. Compared to traditional petrol and diesel vehicles, they offer lower running costs and a preferred driving experience for most motorists.
DriveElectric has been helping Organizations and individuals transition to EVs since 2008, focusing on cost savings and reduced emissions. They also provide services for monitoring and optimising emissions related to charging fleet vehicles.
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