The UK electric vehicle market hit the brakes in November, posting its weakest growth in almost two years, as the Chancellor’s looming pay-per-mile tax caused uncertainty among buyers and caused Tesla to suffer its sharpest fall in registrations.
New figures from the Society of Motor Manufacturers and Traders (SMMT) show just under 40,000 battery electric vehicles (BEVs) were registered last month – just a 3.6% increase compared to November 2024 and a dramatic slowdown for a sector expected to move quickly towards the government’s net zero targets.
It represents the weakest annual expansion since the end of 2023, when global supply chains were still blocked, and leaves BEVs with a market share of 26.4%, below the government’s target of 28% for this phase of the transition.
The slowdown comes after weeks of speculation in the run-up to the budget, in which finance ministry sources revealed and then confirmed plans for a new electric vehicle excise tax (eVED). From April 2028, BEV drivers will pay 3p per mile and plug-in hybrid drivers will pay 1.5p per mile, replacing the fuel tax revenue generated by eliminating petrol and diesel.
For a typical BEV driver driving 8,500 miles per year, the fee equates to £255 in road tax, a significant departure from the current near-zero cost regime.
The SMMT warned that the move “could jeopardize the UK’s net zero transition”, adding that demand could collapse at the exact moment it needs to rise. The Office for Budget Responsibility estimates the change could result in 440,000 fewer electric vehicle sales over the next five years.
SMMT chief executive Mike Hawes said the warning lights were flashing: “This should be a wake-up call. We cannot take sustainable growth in electric vehicles for granted. We should be encouraging drivers to make the switch, not penalizing them for it.”
New data from New AutoMotive suggests Tesla was the industry’s biggest casualty, with UK registrations falling almost 20% month-on-month to 3,800 vehicles, giving it a market share of just 2.5%.
Chinese rival BYD, which relies heavily on hybrids and plug-in hybrids, has more than tripled its UK registrations in the same period.
The divergence reflects a broader shift in buyer sentiment: plug-in hybrids were the fastest-growing powertrain in November, up 14.8%, while gasoline and diesel continued their structural decline.
As well as the new mileage tax for electric vehicles, Rachel Reeves extended subsidies for the purchase of new electric vehicles until 2030, with some new Renault and Mini models now eligible for the maximum discount of £3,750.
But with cost perceptions still the biggest barrier to adoption, analysts warn the government still has work to do.
Jamie Hamilton, automotive partner at Deloitte, said: “The new mileage charge will increase the cost of running electric vehicles and potentially slow adoption. The industry must now redouble its efforts to communicate the long-term value and investment behind the transition.”
With global carmakers investing billions in electrification and the UK’s ZEV mandate gaining strength, ministers are hoping November’s slowdown is just a blip – rather than the start of a much steeper decline.
