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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.