New car registrations fell by 2.5 per cent in January as weak consumer confidence and a tough economic backdrop delivered a fourth consecutive monthly decline.

There were 139,345 new vehicle registrations in January, according to the latest data from the Society of Motor Manufacturers and Traders (SMMT).

New registrations for both private and fleet buyers were down 3.7 and 0.5 per cent, respectively.

There have been concerns over consumer confidence after the British Retail Consortium’s closely watched index found it had slumped last month amid a challenging tax environment, high energy prices and a weaker pound.

The fall in the market was driven primarily by a downturn in petrol car registrations, which were down around 15 per as battery electric vehicle (BEV) registrations jumped 41.6 per cent year-on-year.

The SMMT warned that despite the huge BEV increase, market share still remained short of the 22 per cent target set by government for last year.

“January’s figures show EV demand is growing – but not fast enough to deliver on current ambitions,” Mike Hawes, SMMT chief executive, said.

“Affordability remains a major barrier to uptake, hence the need for compelling measures to boost demand, and not just from manufacturers.”

Jamie Hamilton, automotive partner and head of EVs at Deloitte, said: “It’s been a slow start for UK car sales in 2025 and the electric vehicle surge needs a bigger push. Without clearer industry support, a fully electric future risks stalling on the road.

“The government’s reported plans to introduce subsidies for EV consumer loans could provide a much-needed boost to the private market.

“Making EVs more financially accessible is crucial to driving mass adoption and achieving net zero ambitions.”