The UK new car market continued its positive recovery in July 2026, with fleet and business registrations once again playing a major role in driving demand.
According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), businesses and fleet operators accounted for almost two-thirds of all new car registrations during the month, highlighting the growing importance of company vehicles, salary sacrifice schemes, and business leasing solutions within the automotive sector.
The continued growth reflects improving confidence among businesses, increased availability of new models, and the accelerating transition towards lower-emission vehicles as organisations look to modernise their fleets and meet future sustainability targets.
Fleet and Business Registrations Drive UK New Car Market Growth
Fleet operators remained the strongest performing part of the UK new car market in July, with registrations showing another significant year-on-year increase. For businesses looking to take advantage of the latest market trends, company car leasing provides a cost-effective way to access new vehicles without the financial commitment of ownership
A total of 98,434 new cars were registered by fleet and business customers during July, compared with 88,508 registrations in the same month the previous year.
This represents an 11.2% annual increase, demonstrating continued demand from companies replacing ageing vehicles, expanding fleets, and switching towards more efficient vehicles.
The strong monthly performance follows a broader upward trend, with fleet and business registrations continuing to outperform private vehicle purchases.
Year-to-date figures show that:
- Fleet and business registrations have increased by 7.9% compared with the same period last year.
- A total of 786,162 new company and fleet vehicles have been registered during the first seven months of 2026.
- Fleet customers now represent almost 61% of all new car registrations in the UK so far this year.
This growth highlights how businesses continue to view vehicle leasing and fleet renewal as an important part of their operational strategy, helping them access the latest technology while maintaining predictable monthly costs.
Overall UK New Car Market Continues Recovery
The wider new car market also delivered a strong performance in July, with registrations increasing across both business and private sectors.
A total of 156,571 new cars were registered during the month, representing an 11.7% increase compared with July 2025.
Private motorists accounted for 58,137 registrations, which was a 12.6% increase year-on-year, showing that consumer confidence is also gradually improving despite continued economic pressures.
The latest figures mark the eighth consecutive month of market growth, demonstrating that the UK automotive sector is continuing its recovery towards the registration levels seen before the disruption caused by the Covid-19 pandemic and subsequent supply chain challenges.
Overall, almost 1.3 million new cars have been registered in the UK during the first seven months of 2026, with businesses continuing to account for the majority of demand.
Why Fleet Demand Remains Strong
The continued strength of the fleet sector can be linked to several key factors:
- Salary sacrifice schemes and company car taxation benefits continue to support demand for electric vehicles among employees.
- The growth of electric and hybrid vehicle availability is encouraging companies to review their fleets and transition towards lower-emission options.
- Manufacturers are introducing more competitive pricing, wider model choices and improved vehicle ranges designed specifically for business users.
- Businesses are increasingly choosing leasing to manage cash flow, avoid large upfront vehicle purchases and maintain access to the latest vehicles.
- Companies are prioritising operational efficiency, with newer vehicles offering improved running costs, reliability and technology compared with older fleet assets.
For businesses, the combination of predictable monthly payments, reduced maintenance concerns and access to newer vehicles makes leasing an increasingly attractive option when managing company fleets.
Electric Vehicle Growth Accelerates as Businesses Continue Fleet Transition
The growth of electric vehicles continued to be one of the biggest drivers behind the UK automotive market’s performance in July 2026, with battery electric vehicles (BEVs), plug-in hybrids (PHEVs) and hybrid vehicles all recording increased demand.
Businesses and fleet operators have played a crucial role in accelerating EV adoption, with company car tax advantages, expanding vehicle choice and manufacturer incentives helping organisations move towards cleaner transport solutions.
The latest registration figures demonstrate that electric vehicles are no longer a niche option for businesses, with more companies now considering EVs as a practical replacement for traditional petrol and diesel vehicles.
Battery Electric Vehicle Registrations Reach Record Levels
Battery electric vehicles achieved another record-breaking month in July, continuing the strong momentum seen throughout 2026.
As more manufacturers introduce electric models, businesses now have greater choice when looking for affordable electric vehicle leasing solutions.
BEV registrations increased by 44.5% compared with July 2025, giving fully electric vehicles a 27.5% share of the overall new car market.
The continued growth has been supported by several factors, including:
- A wider choice of electric vehicles available across multiple sectors, from small hatchbacks and family SUVs to premium executive vehicles.
- Improved battery technology providing greater driving ranges and making EV ownership more practical for everyday users.
- Lower running costs compared with petrol and diesel vehicles, particularly for businesses covering higher annual mileage.
- Increasing pressure on companies to reduce fleet emissions and meet environmental targets.
- Growing availability of charging infrastructure across workplaces, public locations and residential areas.
For fleet operators, electric vehicles are becoming an increasingly attractive option due to lower energy costs, reduced maintenance requirements and potential tax advantages.
Plug-In Hybrids and Hybrid Vehicles Continue to Grow
While battery electric vehicles remain the focus of the transition towards zero-emission transport, hybrid technology continues to play an important role within the UK vehicle market.
Plug-in hybrid vehicles recorded significant growth in July, increasing by 33.6% year-on-year and accounting for 14.9% of new car registrations.
Traditional hybrid vehicles also performed strongly, increasing by 11.6% and achieving a 13.2% market share.
The continued popularity of hybrid vehicles reflects demand from drivers and businesses who want improved fuel efficiency while retaining the flexibility of petrol-powered vehicles for longer journeys.
For many organisations, hybrid vehicles provide a practical stepping stone towards full electrification, particularly where charging access or operational requirements make a complete EV transition more challenging.
UK Electric Vehicle Market Still Faces ZEV Mandate Challenge
Despite the strong growth in electric vehicle registrations, the industry remains focused on meeting the Government’s Zero Emission Vehicle (ZEV) mandate targets.
The ZEV mandate requires manufacturers to increase the percentage of new vehicles sold that produce zero tailpipe emissions, with targets increasing each year towards the end of the decade.
Current forecasts suggest that BEVs are expected to achieve around 27.4% of the UK new car market by the end of 2026, based on an estimated total market size of approximately 2.18 million vehicles.
Although this represents significant progress, it remains below the required 33% ZEV mandate target for the year.
Longer-term forecasts estimate BEVs could reach approximately 32.1% market share by 2027, compared with a planned target of 38%.
The figures highlight the challenge facing manufacturers, who are investing heavily in electric vehicle development while balancing customer demand, pricing pressures and regulatory requirements.
Manufacturers Continue Supporting EV Adoption
The expansion of the electric vehicle market has been supported by significant investment from vehicle manufacturers.
Brands are continuing to introduce new electric models, improve battery technology and offer incentives designed to encourage customers to make the switch.
However, industry representatives have warned that current EV growth is still heavily influenced by manufacturer support, including discounts and incentives designed to maintain demand.
Key factors influencing EV adoption include:
- More electric models entering the market, giving customers greater choice across different vehicle sizes and price points.
- Manufacturer-backed incentives helping reduce the gap between electric and petrol or diesel vehicle pricing.
- Business demand increasing as companies look to reduce emissions and improve fleet sustainability.
- Government regulations encouraging manufacturers and businesses to accelerate the move towards zero-emission transport.
For UK businesses, the expanding EV market provides more opportunities than ever to transition company vehicles towards cleaner alternatives while benefiting from lower operating costs.
Industry Response: EV Growth Shows Progress but More Support Is Needed
The continued rise in electric vehicle registrations has been welcomed by the automotive industry, but manufacturers and industry experts have warned that further action is required to ensure the transition to zero-emission transport remains sustainable.
While July’s figures demonstrate strong consumer and business interest in electric vehicles, concerns remain around long-term demand, affordability and the level of support required to meet future emissions targets.
The automotive sector is investing billions into electric vehicle development, manufacturing capacity and charging infrastructure, but industry leaders argue that a successful transition requires both strong vehicle supply and increasing customer demand.
SMMT Highlights Importance of Sustainable EV Growth
The Society of Motor Manufacturers and Traders (SMMT) described July’s electric vehicle performance as a significant achievement, reflecting the continued investment from manufacturers in developing cleaner, more efficient vehicles.
However, the organisation warned that manufacturers are facing increasing financial pressure as they attempt to encourage EV adoption through discounts and incentives.
Industry concerns include:
- Manufacturers are investing heavily in electric vehicle technology while absorbing significant costs to maintain competitive pricing.
- Heavy reliance on discounts and incentives could become difficult to sustain over the long term.
- The transition to electric vehicles requires stronger customer demand rather than relying solely on regulatory targets.
- A balanced approach is needed to protect jobs, investment and the competitiveness of the UK automotive industry.
The SMMT has called for continued collaboration between manufacturers, businesses and Government to create the conditions needed for a successful EV transition.
The organisation believes that increasing the availability of electric vehicles alone is not enough, with affordability, charging infrastructure and consumer confidence all playing an important role in future adoption.
Business Fleets Continue to Support EV Adoption
Fleet operators remain one of the strongest drivers behind electric vehicle growth in the UK.
Unlike private buyers, businesses often have clearer financial incentives to transition towards EVs, particularly through leasing arrangements and company car schemes.
The popularity of electric fleet vehicles has been supported by:
- Lower benefit-in-kind (BIK) tax rates for electric company cars compared with petrol and diesel alternatives.
- Reduced running costs due to lower electricity costs compared with traditional fuel expenses.
- Lower maintenance requirements because electric vehicles have fewer moving parts than combustion engine vehicles.
- Corporate sustainability targets encouraging businesses to reduce their carbon footprint.
- Greater availability of electric vehicles suitable for everyday business use.
For many organisations, leasing provides a straightforward route into electrification by allowing businesses to access the latest EV technology without the risks associated with vehicle ownership and future resale values.
Experts Warn EV Growth Must Become Less Reliant on Incentives
Automotive analysts have recognised the positive momentum behind electric vehicle adoption but have highlighted concerns around whether current growth levels can continue without additional support.
Industry commentators suggest that the next stage of EV adoption will depend on several factors:
- Electric vehicle pricing must continue becoming more competitive against petrol and diesel models.
- Public and workplace charging networks must continue expanding to support growing demand.
- Consumers and businesses need confidence that EVs can meet their daily driving requirements.
- Manufacturers must continue improving vehicle range, charging speeds and affordability.
Although electric vehicle registrations are increasing, the market remains closely linked to financial incentives and manufacturer support.
The coming years will be crucial in determining whether EV demand becomes naturally driven by customer choice or continues to depend on external measures.
Electric Vans Experience Strong Growth
The shift towards electrification is also gathering pace within the commercial vehicle sector, with electric vans recording another strong month. For businesses reviewing their fleet requirements, van leasing offers access to the latest electric and traditional commercial vehicles with predictable monthly costs.
New electric van registrations increased significantly in July, demonstrating growing interest from businesses looking to reduce emissions and operating costs.
Electric vans recorded:
- 4,260 registrations during July.
- A 15.1% share of the new van market.
- Almost 70% year-on-year growth compared with July 2025.
Businesses looking to transition their fleets can now choose from a growing range of electric vans designed for delivery, trade and urban operations.
The latest performance represented one of the strongest months ever recorded for electric van registrations, excluding the traditionally busy number plate change periods in March and September.
The growth of electric vans reflects improving vehicle choice, with manufacturers now offering electric versions across several key commercial sectors, including:
- Small urban delivery vans designed for local businesses and last-mile delivery operations.
- Medium-sized electric vans suitable for tradespeople, service businesses and fleet operators.
- Large electric vans designed for higher-capacity commercial applications.
For businesses operating within urban areas, electric vans can provide significant benefits, including lower running costs, reduced emissions and easier compliance with clean air regulations.
Best-Selling Vehicles Lead the UK New Car Market in 2026
While electric vehicle growth continues to dominate discussions within the automotive industry, traditional vehicle sales also remain strong, with several popular models continuing to attract demand from both private buyers and fleet operators.
The latest registration figures highlight the continued popularity of practical SUVs, efficient family vehicles and new-generation electric models as customers look for vehicles that combine affordability, reliability, technology and lower running costs.
Ford Puma Remains UK’s Best-Selling New Car
The Ford Puma continued its strong performance in the UK market, becoming the best-selling new car in July 2026.
More than 3,500 Ford Puma models were registered during the month, helping the compact SUV maintain its position as one of the most popular vehicles in the country.
The Puma’s success has been driven by several factors:
- A practical SUV design offering increased space and versatility compared with traditional hatchbacks.
- Efficient mild hybrid technology helping improve fuel economy and reduce running costs.
- Strong appeal among both private motorists and company car drivers.
- Competitive pricing and affordable ownership costs compared with larger SUVs.
The model has also performed strongly throughout the year, leading the year-to-date sales rankings with 33,173 registrations during the first seven months of 2026.
Its combination of practicality, efficiency and affordability has made it a popular choice for a wide range of customers.
Nissan Qashqai and Kia Sportage Continue Strong Performance
Following closely behind the Ford Puma in July’s sales rankings were two established SUV favourites.
The Nissan Qashqai secured second place in the monthly rankings, continuing its reputation as one of the UK’s most successful family vehicles.
The Qashqai has remained popular thanks to:
- A spacious interior suitable for families and business users.
- Efficient hybrid powertrain options.
- Strong reliability reputation and long-term ownership appeal.
- Advanced safety and driver assistance technology.
The Kia Sportage ranked as one of the top three best-selling vehicles for July.
The Sportage continues to attract customers through its combination of:
- A high-quality interior and modern technology features.
- A wide choice of efficient petrol, hybrid and plug-in hybrid options.
- A strong manufacturer warranty offering.
- Practical design suited to both personal and professional use.
SUV Popularity Continues to Shape the UK Market
The latest sales figures demonstrate that SUVs remain the dominant choice among UK buyers.
Modern SUVs have become increasingly popular because they provide the practicality of larger vehicles while offering improved efficiency compared with previous generations.
For businesses, SUVs also continue to play an important role within company car fleets, particularly for employees requiring a vehicle that offers comfort, space and professional presentation.
The continued success of SUV models reflects changing customer preferences, with many buyers prioritising:
- Higher driving positions and improved visibility.
- Greater passenger and luggage capacity.
- Enhanced safety technology.
- Hybrid and electric powertrain options.
- Improved efficiency compared with older petrol and diesel models.
Electric Vehicle Sales Rankings Show Changing Customer Preferences
Alongside strong demand for conventional and hybrid vehicles, electric vehicles are becoming increasingly prominent within the UK market.
The latest figures show that fully electric models are now competing strongly with established petrol and hybrid vehicles.
The best-selling battery electric vehicles in July included:
- Renault 5 E-Tech – the UK’s leading fully electric car during the month.
- Kia EV3 – a popular compact electric SUV offering practicality and efficiency.
- Jaecoo E5 – a new electric SUV gaining attention within the growing EV market.
The performance of these models demonstrates the expanding range of electric vehicles now available to UK customers.
Previously, limited model choice was one of the biggest barriers to EV adoption. However, manufacturers now offer electric alternatives across multiple vehicle categories, including:
- Small city cars designed for urban driving.
- Family SUVs suitable for everyday use.
- Premium executive vehicles.
- Commercial vans designed for business operations.
What This Means for Businesses and Fleet Operators
The latest registration data highlights a clear trend: businesses now have more choice than ever when selecting vehicles for their fleets.
Whether choosing efficient hybrid models, fully electric vehicles or traditional petrol options, organisations can now select vehicles based on their operational requirements, budget and sustainability objectives.
Key considerations for businesses include:
- Electric vehicles can help reduce fleet running costs and support environmental targets.
- Hybrid vehicles provide flexibility for businesses not yet ready for full electrification.
- Popular SUV models offer practicality for employees who need additional space and comfort.
- Vehicle leasing allows businesses to access the latest models without large upfront investment.
As manufacturers continue expanding their electric and hybrid ranges, the UK vehicle market is expected to become increasingly diverse, giving businesses greater flexibility when planning their future fleet strategies.
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