Britain’s new car market had a strong July in 2026, with registrations rising 11.7% to 156,571 units. It was the best July performance since 2019 and marked the eighth consecutive month of growth, showing that the market is continuing its recovery towards pre-pandemic levels.

The headline figures look especially positive for electric vehicles. Battery electric car registrations rose 44.5% compared with a weaker July 2025, helped by wider model choice, heavy discounting, and government incentives.

Still, the picture is more complicated than it first appears. Electric vehicle registrations are growing, but not fast enough to meet the 33% mandate target. The latest outlook expects battery electric vehicles to take 27.4% of the 2026 market, leaving a clear gap between policy ambition and real consumer demand.

New Car Registrations Continued to Grow

July was a strong month across the new car market. Total registrations reached 156,571 units, up from 140,154 in July 2025.

Growth was recorded across all major buyer groups. Private demand rose 12.6% to 58,137 registrations. Fleet deliveries increased 9.5% to 93,734 units, accounting for 59.9% of the market. The smaller business segment grew sharply, rising 61.3% to 4,700 registrations.

This broad-based growth suggests that the market is not relying on just one type of buyer. Private customers, fleets, and business users all contributed to July’s improvement.

Electric Vehicles Had a Record July

Electrified vehicles played a major role in the market’s growth.

Battery electric vehicles recorded another July volume record, with registrations rising 44.5% to 43,106 units. Their market share increased to 27.5%, compared with 21.3% in July 2025.

Plug-in hybrids also performed strongly, rising 33.6% to 23,359 registrations and taking a 14.9% share of the market. Hybrid electric vehicles increased 11.6% to 20,711 units, holding a 13.2% share.

Together, these figures show that electrified models are becoming a larger part of the UK’s new car market. Buyers now have more choice, more competitive offers, and more reasons to consider moving away from traditional petrol and diesel models.

Petrol and Diesel Continued to Lose Ground

While electrified cars gained momentum, petrol and diesel registrations declined.

Petrol registrations fell 5.2% to 62,799 units. Even so, petrol remained the largest single fuel type in July, with a 40.1% market share.

Diesel continued its long-term decline, falling 17.7% to 6,596 registrations. Its market share dropped to 4.2%, down from 5.7% a year earlier.

This shift shows how quickly the market is changing. Petrol still leads in overall volume, but electrified vehicles are taking a growing share of new registrations, while diesel continues to move further into the background.

The Mandate Gap Remains a Challenge

Despite July’s strong electric vehicle performance, the latest outlook remains cautious.

The total new car market is now expected to reach 2.18 million registrations in 2026. Battery electric vehicles are forecast to claim 27.4% of that market, up from the 26.8% share expected in April.

However, that remains well below the 33% mandate target for 2026. Looking further ahead, battery electric vehicle share is expected to rise to 32.1% in 2027, still short of the 38% target.

This gap matters because manufacturers are under pressure to meet ambitious zero-emission requirements. When natural demand does not rise quickly enough, brands often rely on discounts, incentives, and other financial support to move electric vehicles in larger numbers.

Discounts Are Driving Demand, but at a Cost

Heavy discounting has helped increase electric vehicle registrations, but it is also creating pressure for manufacturers.

Lower prices can make electric cars more attractive to buyers, especially during a period when many households are watching their budgets carefully. Government incentives and manufacturer offers have also helped support demand.

However, this approach is expensive. Deep discounts can weaken profitability, reduce residual values, and make it harder for companies to justify future investment. The industry is also concerned that the value of regulatory flexibilities will decline as targets become tougher.

In simple terms, the market is moving towards electric vehicles, but the pace is being pushed by costly support rather than fully natural demand.

Policy Changes Could Affect Future Sales

The outlook also reflects concerns about changes to electric car grant eligibility.

The latest forecast was based on manufacturer views submitted before grant eligibility ended for demonstrator and courtesy cars in mid-July. These vehicles currently account for around 10% of battery electric registrations.

Around 4 in 10 battery electric registrations are delivered by models eligible for the electric car grant. That means any change in eligibility could have a noticeable effect on future performance, especially if buyers delay purchases or manufacturers need to adjust pricing strategies.

Best-Selling Models in July

The Ford Puma was the UK’s best-selling new car in July 2026, with 3,531 registrations.

It was followed by the Nissan Qashqai with 3,224 registrations and the Kia Sportage with 3,205. The Jaecoo 7 took fourth place with 2,709 registrations, just ahead of the MG HS with 2,703.

The rest of the top 10 included the Ford Kuga with 2,533 registrations, the Jaecoo 5 with 2,481, the Volkswagen Golf with 2,413, the Mini Cooper with 2,350, and the Vauxhall Corsa with 2,326.

The ranking shows a varied market, with compact SUVs, family cars, and familiar hatchbacks all competing strongly for buyers.

What This Means for Buyers

For car buyers, July’s figures point to a market with more choice and stronger competition.

Electric vehicles are becoming more visible, and discounts may make some models more attractive than before. Plug-in hybrids and hybrids are also gaining ground, offering options for drivers who are not ready to move fully electric yet.

At the same time, buyers should look beyond the headline price. Running costs, charging access, insurance, resale value, and available incentives all matter. For many drivers, the best choice will depend on how far they travel, where they can charge, and whether they mainly use the car for city driving, commuting, or longer journeys.

July 2026 was a strong month for Britain’s new car market. Registrations rose 11.7%, electric vehicle demand increased sharply, and the market recorded its best July performance since 2019.

But the transition to electric vehicles still faces a difficult reality. Battery electric vehicles are growing quickly, yet the expected 27.4% market share for 2026 remains well below the 33% mandate target. In 2027, the forecast share of 32.1% is also behind the 38% target.

The direction of travel is clear: electrified vehicles are becoming more important in the market. The challenge is whether demand can grow fast enough without relying too heavily on discounts, incentives, and financial pressure on manufacturers.

For now, July’s results show both progress and tension. The EV market is moving forward, but the road to a fully sustainable transition is still far from smooth.