- EV demand is rising, with Auto Trader reporting an 11% YoY increase in visits and a 20% rise in enquiries.
- Manufacturers are offering bigger discounts, with EV price cuts reaching 11.5% to meet the 28% ZEV mandate target.
- Industry leaders call for a VAT reduction on EVs, which could boost demand by 15% and add 267,000 more EVs to UK roads by 2027.
The future is electric: EV demand climbs as industry calls for further incentives
Auto Trader reports a significant increase in EV demand, with visits to its new car platform rising 11% year-on-year in March 2025. Enquiries for new cars have also surged, up 20% since the start of the year.
Manufacturers are responding by offering substantial discounts. The average price reduction on new EVs has climbed to 11.5% off the recommended retail price (RRP), up from 10.9% last month. These incentives aim to attract more buyers and align with the government’s ambitious 28% Zero Emission Vehicle (ZEV) mandate target for 2025.
MG leads the charge
MG continues to dominate the EV market. The MG ZS remains the most in-demand electric car, accounting for 10.8% of enquiries. Close behind is the MG4 with 10.1%, while the newly launched Skoda Elroq has also gained traction, securing 4.2% of enquiries.
In terms of brand popularity, MG leads with 21.5% of total EV enquiries. BMW follows with 13.9%, and Kia holds 6.3%. Other brands like Renault, Porsche, and Skoda are also seeing increased interest.
Bex Kennett, New Car Performance Director at Auto Trader, commented:
“Manufacturers have been working really hard to stimulate demand in March and Auto Trader has been providing retailers a great platform to connect with prospective buyers. Despite the challenges, there have been some encouraging signs through increased leads which have been driven by manufacturer and retailers offering better value for consumers. The brands winning in the electric space are different to the overall list and are those maximising the opportunity by putting their stock in front of the largest automotive audience in the UK.”
Calls for further incentives
Despite these positive trends, industry leaders believe more can be done to accelerate EV adoption. The Society of Motor Manufacturers and Traders (SMMT) has called on the UK government to halve the Value Added Tax (VAT) on new EV purchases, reducing it from 20% to 10%.
According to industry projections, this tax reduction could boost EV demand by 15% over the next two years, resulting in an additional 267,000 electric vehicles on UK roads between 2025 and 2027. This increase would also help manufacturers meet stringent ZEV targets.
Research shows that a VAT cut is one of the most effective measures to encourage drivers to switch to electric. Nearly 37% of drivers interested in going electric said a tax reduction would speed up their decision. Even among those not currently considering an EV, 26% said a VAT cut would make them rethink.
Looking ahead
With increasing consumer interest, attractive manufacturer discounts, and potential government incentives, the EV market is poised for significant growth. These developments not only benefit consumers but also contribute to environmental goals by reducing carbon emissions.
