UK October Registrations Rise 5.4% as SMMT Demands ZEV Mandate Rethink

UK new car registrations rose 5.4% to 152,730 units in October, the eleventh consecutive monthly increase, according to the Society of Motor Manufacturers and Traders (SMMT). Behind that growth sits an uncomfortable arithmetic: the industry body expects battery electric vehicles (BEVs) to reach only 27.2% of the market this year against a 33% ZEV Mandate target, and it is pressing the government to revise the rules.

The full-year market is on course for roughly 2.2 million units, GlobalData estimates — well below pre-Covid levels, and sustained only by intense competition driven in part by recent Chinese brand entrants. October's growth, in other words, reflects discounting as much as demand.

Where did the growth come from?

Plug-in hybrids (PHEVs, cars combining a battery with a combustion engine) and BEVs accounted for all of it. PHEV registrations rose 30.1% to a 15.0% market share. BEV deliveries increased 32.7% and took 32.0% of the market — their highest share this year — as manufacturers intensified efforts to bring registrations closer to the annual mandated target, repeating the pattern of the previous two years.

Hybrid (HEV) volumes fell for a second month, down 5.0%. Even so, electrified cars of all three types accounted for 59.0% of October registrations, almost six in ten.

Cumulative BEV volume now stands at 503,805 units for the year to date, up 30.4% on the same period a year ago. The SMMT says manufacturers have committed £14.3 billion to UK EV manufacturing since 2020, delivering more than 180 BEV models with an average range above 300 miles on a single charge.

Why is the SMMT criticising the ZEV Mandate?

The ZEV Mandate (the UK regulation setting minimum annual BEV sales shares) was designed, the SMMT argues, in "very different global and domestic economic conditions." Manufacturers have since been forced to spend billions on discounts, low and 0% finance, deposit contributions and even subsidised charging to incentivise sales beyond underlying demand.

Those practices, the body says, undermine the UK's attractiveness as a market and manufacturing location, erode profitability, and harm consumers long-term: lower trade-in values leave owners less able to afford their next car.

The gap between actual demand and mandated share is set to widen. Next year the target rises to 38%. By 2028, the SMMT expects BEV share of 37.5% against a mandated 52% — a shortfall of 14.5 percentage points, more than double this year's gap.

SMMT Chief Executive Mike Hawes said: "Almost one in three new cars registered in October was electric — great progress in the transition, but one that comes at enormous cost. The industry and government are spending billions to help drivers switch, but that support cannot be sustained indefinitely with the gap to mandated targets set to more than double by 2028, just as a new EV-only tax is introduced. Higher targets may force supply, but they do not create demand. The ZEV Mandate review must deliver substantive reform effective immediately to ensure we have a healthy market and an attractive pitch to investors."

The SMMT is urging the UK Government to make "substantive changes to the targets, revising them down so they better reflect demand, alongside full flexibilities throughout the regulation to bridge the remaining gap."

Which models led the market?

The Jaecoo 7 topped the October sales charts, as it did in September and March. The plate-change months of March and September typically see concentrated OEM marketing activity and dealer discounts, and the highly competitive conditions of September spilled over into October. Year-to-date, Ford's Puma holds the number-one position — a sign that the incentive war is being fought across powertrains, not only on electrified models.

What to watch next: the outcome of the ZEV Mandate review, and whether the government revises the 38% target for next year before the shortfall more than doubles by 2028.