FTSE 100 LIVE: Stocks rise as traders await ECB interest rate decision

The UK’s new car market returned to growth in May, as registrations rose 1.6% to 150,070 units, according to the latest data published today by the Society of Motor Manufacturers and Traders (SMMT).

It was the best May performance since 2021, but still 18.3% lower than in pre-pandemic 2019 and only the second month of growth this year, reflecting brittle consumer confidence and economic turbulence.

Fleets and businesses drove the growth, up 3.7% and 14.4% respectively and responsible for 62.6% of registrations, while interest from private buyers fell for the second consecutive month, down 2.3%.

There were double digit declines in deliveries of both petrol and diesel cars – down 12.5% and 15.5% – while demand for the latest electrified models increased dramatically to take a combined 47.3% market share.

Uptake of hybrid electric vehicles (HEVs) grew 6.8% to 20,351 units, while plug-in hybrid electric vehicles (PHEVs) were up more than half (50.8%) to 17,898.

Registrations of battery electric vehicles (BEVs), meanwhile, rose by 25.8%, accounting for 21.8% of the market as manufacturers continued to support sales with attractive incentives.

Despite this, BEV registrations year-to-date have only reached 20.9% market share – still seven percentage points off the 28% mandated by regulation. Moreover, significant discounting is still ongoing despite new model introductions and increasingly affordable offerings.

While recent adjustments to the ZEV Mandate were welcome, the current market situation is unsustainable for a sector already facing multiple cost pressures.