New Car Sales Down 5% in July as Brits Await Electric Car Grant Details

New car sales in the UK declined 5% in July to 140,154 units, the worst July since 2022. Registrations of battery electric vehicles rose 9.1%, but growth was the second weakest since April. The SMMT attributed the decline to buyers waiting for details on the £650m Electric Car Grant, which was announced in August. The grant will apply to certain Citroen models.

July 02, 2025 - New car sales in the UK declined by 5% in July, registering 140,154 units, the lowest July figure since 2022 [1]. The Society of Motor Manufacturers and Traders (SMMT) attributed this decline to buyers waiting for details on the £650m Electric Car Grant (ECG) announced in August.

The grant, which aims to boost electric vehicle (EV) sales, is expected to apply to certain Citroen models. Despite the overall decline in new car sales, registrations of battery electric vehicles (BEVs) rose by 9.1% in July, marking the second weakest growth since April. China’s BYD more than quadrupled its sales last month, registering 3,184 units, while Tesla's UK sales more than halved, with just 987 new Teslas registered in July [1].

The UK’s new car market shrank by 5% in July, with 140,154 units registered, the weakest July since 2022. Mike Hawes, SMMT chief executive, highlighted the market’s sensitivity to external factors and the need for consumer certainty. He emphasized that confirming which models qualify for the new EV grant, alongside compelling manufacturer discounts, could send a strong signal to buyers and boost demand [1].

The government's electric car grant has faced criticism and confusion, with car companies offering their own discounts to attract customers. Some brands, such as Alfa Romeo and Cupra, are offering flat £1,500 discounts on selected models, while GWM (Great Wall Motors) is offering a £3,750 discount on all GWM Ora 03 GT models [2]. The government's grant program remains unclear, with manufacturers waiting for approval and customers canceling orders, leading to temporary discounts.

The uncertainty surrounding the ECG has had a significant impact on the UK's new car market. As the government and manufacturers work to clarify the grant program, investors and financial professionals should monitor the market for any developments that could influence sales and consumer behavior.

References:
[1] https://www.theguardian.com/business/live/2025/aug/05/bp-cost-cuts-profits-dividend-car-sales-services-sector-business-live-news-updates
[2] https://www.thecarexpert.co.uk/electric-car-grant-all-the-evs-with-discounts/