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The UK new car market returned to growth last month as demand for electric cars soared, but the industry says the discounting behind the uptick is unsustainable and the government must do more to support the switch.

The Society of Motor Manufacturers and Traders (SMMT) notes that it was the best May for new car registrations since 2021 but still 18.9% down on the same month in pre-pandemic 2019. It is also only the second month of growth so far in 2025, "reflecting brittle consumer confidence and economic turbulence".

The organisation attributed the uptick primarily to a surge in fleet registrations, which climbed 3.7% year on year to just over 90,000, accounting for a 60% market share.

Private car sales, meanwhile, were down 2.3% and accounted for 37.4% of the market - and while business registrations grew by a substantial 14.4%, they still made up only 2.6% of registrations.

It was another month of growth for electric cars, with nearly 33,000 units registered – a 25.8% yearly increase – accounting for 21.8% of the market. That's still far below the 28% EV sales mix that manufacturers must achieve this year under the ZEV mandate, but well above the 13.6% and 11.9% shares held by hybrids and plug-in hybrids respectively.

The SMMT says the rise in EV registrations comes off the back of the "attractive incentives" manufacturers are offering in a bid to drive uptake, although the organisation repeated its call for the government to "match this commitment with fiscal incentives".

Halving VAT on new EV purchases, the SMMT says, would put 276,000 new EVs on the road in the next three years, in place of ICE vehicles, resulting in an annual reduction in CO2 emissions of six million tonnes. 

It also said the government could "send a signal that now is the time to switch" to EVs by reducing the VAT on public charging and removing electric cars from the Expensive Car Supplement (ECS) - a move the government is understood to be considering already. 

While EV sales were up, diesel's decline continued with a huge 15.5% drop in registrations last month, taking oil-burners to just a 5.2% market share. And while petrol cars still make up nearly half of registrations, their sales were down a heavy 12.5%. 

SMMT chief executive Mike Hawes said: "A return to growth for new car registrations in May is welcome but manufacturer discounting on new products continues to underpin the market, notably for electric vehicles. 

"This cannot be sustained indefinitely as it undermines the ability of companies to invest in new product development – investments which are integral to the decarbonisation of all road transport. 

"Next week’s Spending Review is the opportunity for government to double down on its commitments to net zero by driving demand through fiscal measures that boost the market and shore up our competitiveness."

The Lotus Emira has been updated with a series of refinements that promise to bring both a more engaging drive and greater levels of comfort.

The Emira V6 SE (priced from £96,500) gets retuned dampers and new alignment settings that are said to improve both its ride and handling.

Its manual gearbox also gets new mounts that are intended to improve the precision of gearchanges. Autocar previously found it prone to hesitation when slotting the gearlever into higher ratios when rushing a shift. 

Meanwhile, the Mercedes-AMG-powered four-cylinder Emira Turbo (from £79,500) gets a reworked dual-clutch automatic gearbox that is said to change gears more quickly and be smoother in its delivery.

Both versions get updated cooling systems with rerouted lines, improving flow to the gearbox oil cooler and the main radiator.

Lotus said this reduces temperatures and sheds weight, although it has yet to specify how much lighter the new Emira is.

It has also recalibrated the engine thermostat so that it doesn't open until 75deg C – up 10deg C on its current specification – to improve performance in hotter climes.

As well as technical updates, Lotus has introduced a new Racing Line trim for both the Turbo and V6 models. This adds a lower-body pinstripe in yellow, red or silver, mirror caps painted the same colour and monochrome exterior badging. It costs an extra £3000.

Technology giant Siemens has been named as the sponsor of the 2025 Autocar Awards, which will celebrate the people and organisations shaping the future of automotive - as well as the best cars on sale.

This year's awards ceremony takes place on 24 June, where Autocar and Siemens will name the industry's most innovative and impactful individuals, and provide a platform for them to tell their stories. 

As part of Autocar's collaboration with Siemens, the two brands will also host a free, interactive webinar on 25 June in which we will delve into how software is defining the future of automotive.

As its role in vehicle development and functionality becomes ever-more important, there are huge questions over what software means for how we use our cars - and what the future holds.

Siemens is a technology leader with a significant influence on the mobility sphere so is well placed to help answer those questions and reveal the full potential of software in this space.

How can manufacturers upgrade cars post-purchase? Does your car have untapped technological potential built in already? What is a software-defined vehicle? These are just some of the questions we’ll seek to answer in our free webinar on Wednesday 25 June from 14:00-15:00.

Join Siemens head of automotive, battery and mobility Uday Senapati, Volvo Cars software engineering boss Alwin Bakkenes, Autocar deputy editor Felix Page and another special industry guest – to be announced in the coming weeks – for an insightful and interactive deep-dive into the world of automotive software.

Mark Tisshaw, Autocar editor, said: “Throughout our collaboration with Siemens, it has become clear just how deeply connected the company is to the automotive industry and how influential its relationships are at every level.

“We are thrilled to partner with Siemens to tell the stories of the industry's most impressive individuals and companies at this year's Autocar Awards ceremony and to hear how the company's insights and expertise are shaping the future of the car in our upcoming webinar.”

The webinar will be broadcast live on Wednesday 25 June from 14:00-15:00, with the opportunity to put questions to our expert guests.

Sign up here to watch for free

Meet the panellists 

Uday Senapati

As head of automotive, battery and mobility for the EMEA region at Siemens Advanta, Uday is helping to expand the company's portfolio f consulting and implementation services for the e-mbobility industry. 

Having worked at General Motors, JLR, Bentley and Group Lotus, he has a wealth of automotive experience that he will leverage in his efforts to establish Siemens as a leading consulting and integration partner for the increasing number of businesses making a strategy shift towards electric mobility. 

Alwin Bakkenes

Alwin is head of software engineering and R&D at Volvo Cars. He leads the team responsible for development of the technology stack at the heart of Volvo's in-car systems and wider user experience.

He has experience in product strategy and programme execution that helps guide Volvo's development of next-level safety technology - working towards autonomy and a software-defined platform. 

The new Mercedes-Benz GLC EV will arrive later this year as an indirect replacement for the EQC SUV, marking a strategic shift in Mercedes' electric model strategy: one focused on integration rather than reinvention.

This more pragmatic approach from Mercedes will result in the GLC EV slotting alongside a facelifted version of the combustion-engined GLC next year, wearing a near-identical look inside and out. 

Company boss Ola Källenius wants less differentiation and greater cohesion between different powertrains in a bid to drive EV sales, instead of its previous push of designing distinct EVs with unique names and positioning.

Given that the GLC has regularly been Mercedes' best-selling model since its introduction in 2015, it's hoped that the GLC EV can leverage the equity already built by the moniker and be a catalyst for Mercedes’ EV sales.

The strategy also streamlines development and production, a crucial consideration as Mercedes-Benz seeks to cut costs as it scales up its number of electric models.

While the next CLA will be the first to follow this new strategy, when both the EV and ICE variants are launched later this month, the GLC EV is the first car to arrive alongside a sibling that's already on sale with petrol, diesel, and plug-in hybrid powertrains.

Such is the importance of the new GLC EV, given its status as a rival to the Audi Q6 E-tron, BMW iX3 and Porsche Macan Electric, that it's set to headline Mercedes’ display at the Munich motor show in September.

An early 2026 launch is pencilled for the UK.

The GLC EV is the first model to use Mercedes' new MB.EA platform – a dedicated EV platform that’s also planned to underpin the upcoming electric version of the C-Class saloon and junior G-Class off-roader, both set to be revealed in 2026.

It's also the first model to use Mercedes' eATS 2.0 drivetrain, as previewed by the Vision EQXX engineering concept in 2023. In its most potent dual-motor, four-wheel-drive form, it will offer up to 483bhp. A single-motor, rear-wheel-drive model with 268bhp is also under development.

Power is drawn from a 94.5kWh nickel-manganese-cobalt (NMC) battery, which is claimed to deliver a range of over 404 miles.

It all operates on a new 800V electrical architecture that provides a charging speed of up to 320kW. This is good for a 162-mile recharge in 10 minutes.

Efficiency is further boosted by a new heat pump, which is not only significantly more effective than the system in use today but also far more compact.

This has allowed Mercedes to integrate a 100-litre frunk in addition to a 560-litre rear boot, providing the GLC EV with even greater luggage space than the ICE GLC on sale today.

Additionally, Mercedes has developed a sophisticated new brake energy recuperation system, dubbed One Box. Unlike in traditional braking systems, the brake pedal is decoupled from the physical braking system, with computers calculating how much regen and how much physical disc should be used for the desired braking levels.

Dominik Voogdt, head of overall vehicle engineering for the GLC EV, describes this new braking system as a “game-changer” for overall efficiency.

The Galtispuoda Pass: a test of grit and grip

For my first drive of the GLC EV, Mercedes has brought me to the Galtispuoda mountain pass, just outside Arjeplog in Sweden’s Arctic north. This winding, snow-covered mountain road is a relentless test of a car’s mettle. It’s got it all: steep inclines, precipitous descents, fast open bends and sharp hairpins – all with surfaces that, at this time of year, shift unpredictably from compacted snow to sheer ice and back again before you realise.

With a heavy cloak of disguise covering the prototype’s dashboard and other areas, we can’t say much about the interior design yet, except that it departs quite radically from that of the ICE GLC models, which are likely to adopt it, along with a new pillar-to-pillar display panel and other digital developments, including the new MB.OS operating system, as part of a mid-life facelift before the end of next year.

That said, the driving position and ergonomics all feel familiar, with typical Mercedes refinement and attention to detail. A large glass roof floods the cabin with natural light, while a longer wheelbase than ICE GLC models (a benefit of the EV's MB.EA platform) provides additional space, much of which has been allocated to extending rear-seat leg room. It’s very roomy, noticeably so in the back.

But I haven’t flown halfway to the North Pole to be a passenger: I'm here to drive. From my starting point at the summit of the Galtispuoda, there’s a silent yet undeniable urgency to the qualities of the new eATS 2.0 drivetrain in the first mile or so, the kind that pins me to the driver’s seat when traction is found and exploited by the GLC EV’s fast-reacting four-wheel-drive system and other driving assistance systems. Despite the treacherous conditions, there’s dependable traction and swift acceleration on the straighter sections of the pass.

The stability-control system works rapidly and completely in the background without ever feeling intrusive or overbearing, keeping progress smooth and controlled. Voogdt says changes to the vehicle operating system have reduced the amount of CPU networking, providing faster and more seamless control of power to each of the wheels.

It shows. Even in these conditions, the GLC EV builds speed effortlessly. But it’s in the corners where it really impresses. The steering, typically light in feel, is very precise and offers quite a lot of feedback, inspiring confidence from the outset. It’s backed up by a rear-wheel steering function that has been tuned by the same team of engineers responsible for the similar systems used by Mercedes-AMG models, with 4.5deg of rear steer in this prototype.

The GLC EV's overall agility belies its size and weight. It’s not just the way it turns in sharply and confidently; it’s the composure it maintains mid-corner when the surface shifts from snow to ice and back again before you even reach the exit that gets my attention.

I'm driving with measured throttle inputs through the winding sections of the pass, being careful to slowly work up to the limits of what the road conditions allow. But even so, the GLC EV feels extremely lively, changing direction with truly eager qualities. And there are no specially prepared spiked tyres to enhance grip – just regular winter tyres.

The air suspension, with its variable ride height, keeps body movement well controlled. These aren't the sort of conditions in which to make a definitive call on the finer points of its double-wishbone and five-link suspension, but it’s already clear the GLC EV operates on a far higher dynamic level than the old EQC. It’s fluid and well balanced, with a greater sense of control and precision.

And what of those 'game-changing' new brakes? Apart from the dependable feel of the pedal, what’s impressive is just how much of the braking force is handled purely by regen, even in situations where you would expect the friction brakes to take over. The car brings itself to a complete stop under what feels like genuinely hard braking without ever engaging the physical brakes.

You alter the amount of regen by tapping the gear selector stalk forward and backward. It’s seamless, efficient and surprisingly effective.

The GLC EV will be produced at Mercedes plants in Bremen, Germany, and Beijing, China, with the possibility of additional production in Tuscaloosa, US, depending on tariff considerations.