Fleet and business new car registrations up almost 10% in March

Fleet and business new car registrations combined increased by 9.8% year-on-year in March, with retail sales up by an even higher 14.5%.

Overall, the new car market rose by 12.4% year-on-year, with 357,103 units registered, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). 

It builds on the March 2024 performance, where uptake rose by 10.4%, with this year’s ‘new plate’ month representing the best March performance since 2019.

Fleet and business reported 210,062 registrations in the month, equating to a 58.8% market share.

Registrations by channel in March

Source: SMMT

Registraions by channel - year-to-date

Source: SMMT

Year-to-date, fleet and business registrations have increased by 4.6%, with 353,380 cars registered in Q1, compared to 227,122 units in retail – a 9.5% rise.

Year-to-date, fleet and business holds a 60.8% market share.

Largest month ever for registrations of electric cars

All types of electrified vehicles recorded growth in the month, with hybrid electric vehicles (HEVs) up 27.7%, plug-in hybrids (PHEVs) up 37.9%, and battery electric vehicles (BEVs) up a massive 43.2% as manufacturers incentivised uptake with significant discounting.

As a result, March became the largest month ever for registrations of electric cars. 

Registrations by fuel type in March

Source: SMMT

Some 69,313 new cars reached the road as manufacturers sought to deliver ever more zero-emission vehicles to drivers during the new ‘25 plate’ month, which usually accounts for around 16% of annual registrations and, as such, provides a strong indicator of likely overall annual performance. 

While EV market share improved significantly on March 2024, at 19.4% it remains more than eight percentage points behind targets set by the zero emission vehicle (ZEV) mandate.  

Furthermore, given the VED expensive car supplement now applies to new electric vehicles costing more than £40,000, the SMMT says that the March EV performance will have been boosted by shrewd buyers seeking to get ahead of the taxation increase. 

The SMMT says that manufacturers continue to incentivise EVs, incentives that cost the industry some £4.5 billion last year. 

Year to date, however, BEV uptake comprises 20.7% of the market, highlighting the importance of Government incentives and mandatory targets for chargepoint rollout to reassure consumers and stimulate EV demand, the SMMT argues. 

Mike Hawes, SMMT chief executive, said: “A welcome return to growth, and substantial growth at that, is a fillip for the industry. 

“Moreover, with March being the best month ever for electric car registrations, there is reason for optimism. 

“Manufacturers remain committed to the market decarbonisation the country and the environment demands, but we need sustained growth, not a short-term bubble driven by unsustainable manufacturer discounting and drivers rushing to beat a tax hike. 

“Without substantive government support for consumers, the current regulatory regime is undeliverable. 

“A rapid response to the government consultation is therefore needed - one that adds flexibilities that reflect the natural level of demand and supports the industry to deliver growth in the face of a tough set of global challenges.”

Jon Lawes, managing director at Novuna Vehicle Solutions, says that the Chancellor’s Spring Statement was a missed opportunity to accelerate adoption and maintain impetus in the EV market.  

“The Government’s lack of decisive fiscal reform risks stalling the UK’s transition at a critical moment for the market,” he added. 

“Despite a surge in availability of more affordable electric models – particularly from Chinese manufacturers – which is driving greater consumer choice and shaking up the market, current tax policy is a deterrent to adoption.

“With impending US tariffs sending shockwaves through the UK automotive sector, which is already still in limbo awaiting clarity on the zero emission vehicle mandate consultation, we need urgent action and revised targets to restore momentum. 

“Without intervention, the UK risks putting the brakes on progress at precisely the moment it needs acceleration.”

Fleets driving BEV market

Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, says that the consistent growth in the BEV market in recent months highlights some positive indicators for the future, with fleet sales continuing to dominate the lion’s share of the market. 

“Private demand is picking up, but challenges remain in addressing concerns around access to charging points and the time it takes to charge an electric vehicle,” he added. 

“We’re also still waiting on the output from the government's consultation on the zero emission vehicle mandate. The industry needs clarity if the transition to electric is going to continue at pace.

“However, recent developments on the Industrial Strategy, with its commitment to substantial investment – including hundreds of millions of pounds earmarked for expanding semiconductor production in Wales – is a very positive step. 

“This dedication to nurturing a resilient and globally competitive EV supply chain here in the UK, is exactly the type of initiative that will propel growth and solidify the country’s position in sustainable mobility.”

Reflecting on the growth in retail sales, Edwin Kemp, director at EY-Parthenon Strategy, said: “Much of last year’s growth in new car registrations was driven by a consistent upward trajectory of fleet sales, whilst there were marked challenges for private retail demand. However, the most recent data showed growth across both sales types.

“The real question is whether this marks the beginning of a more sustained positive trajectory, or just a one-off, particularly given the ongoing market headwinds for new car registrations.”

He added: “On the powertrain transition, whilst March 2025 was the strongest month ever for BEV uptake, the complex combination of affordability challenges, infrastructure gaps, battery degradation and regulatory hurdles continue to keep BEV market share below the Government’s ZEV mandate targets.

“Unlocking growth in BEV sales will be critical for the industry going forward, as manufacturers pursue regulatory compliance, and the UK continues to ramp up its net zero efforts.

“Incentivising both consumers and businesses to purchase EVs in the near term will be pivotal, but this is easier said than done given the complex landscape and persistent consumer sentiment concerns.”

Susan Wells, director of EV and solar at Hive, agrees. She said: “Although an uplift in registration figures is encouraging, the Government must continue to provide incentives, not roadblocks, to further increase adoption levels.

“Changes to vehicle excise duty, which will see EV owners pay car tax for the first time, could act as a barrier for drivers looking to make the switch.

“With drivers already cautious about EV-related expenses, we need bold financial incentives, not penalties, to accelerate our transition away from fossil fuel vehicles.”