Registrations of new cars fell by 1 per cent last month, official figures show, but electric vehicle sales soared by two fifths as drivers scrambled to beat Labour's April tax grab on battery-powered models.
Industry body the Society of Motor Manufacturers and Traders said 84,054 new cars were registered in February, down some 800 units on the same month last year.
But while deliveries of new petrol cars slipped by 17.3 per cent, there was a 41.7 per cent surge in sales of EVs.
As such, electric cars represented one in four new motors entering the road in February, taking a market share of 25.3 per cent.
The SMMT said the growth in EV demand was 'unsurprising' as private buyers brought forward purchases to avoid major tax changes coming in two months' time.
All electric cars will - for the first time ever - be subject to vehicle excise duty (VED) at a standard rate of £195 a year under rules proposed by the former Tory government that will be introduced by Chancellor Rachel Reeves on 1 April.
And all new battery vehicles that cost over £40,000 from the same date will also be hammered by an expensive car supplement - this will force owners to stump up £620 per annum from 2026.
Electric vehicle sales boomed last month as private buyers scampered to get their hands on new models ahead of VED changes introduced in April that will see the cost to tax an EV rise by up to £620 a year
Some 21,244 EVs were registered last month, up from 14,991 in February 2023, SMMT data shows.
The remarkable uptake has been driven by a growth in private sales while fleet and business registrations - which have for months been responsible for rising EV sales - slowed.
Tesla posted a 20 per cent year-on-year increase in registrations, selling 3,851 EVs last month compared to 3,192 in the previous February, the industry figures show.
Its Model 3 saloon was the second most popular new car last month with 1,990 deliveries, just ahead of the Model Y SUV with 1,861.
The best-selling new model in February was the Mini Cooper (2,074 sales), which is available as an EV as well as a conventional petrol engine.
The rising popularity of new Chinese EV brands, including BYD (1,177 registrations), Jaecoo (725) and Omoda (519), also pushed EV sales higher last month.
Sales of battery electric vehicles (BEV) in February rose by a massive 41.7% as drivers brought forward purchases to avoid Labour's April tax grab
Tesla posted a 20% year-on-year increase in sales in February. Its Model 3 saloon (pictured) was the second most popular new car in the month with 1,990 registrations
February's best-selling new car was the Mini hatchback, which is available with petrol engines but also EV versions
'This dramatic increase compared with the rest of the market was unsurprising considering the forthcoming tax changes in April, which will see many EV models subject to the vehicle excise duty expensive car supplement (ECS) for the first time,' the SMMT said.
While the trade body said this maintained 'positive trajectory' for EV uptake, it pointed to the market share still being short of the 28 per cent requirement set out by the Government's binding Zero Emission Vehicle (ZEV) mandate for 2025.
Car manufacturers reportedly took a £4.5billion hit by discounting their electric vehicles in 2024 in an effort to meet ZEV requirements last year.
'Although February’s figures show a subdued overall market, the good news is that electric car uptake is increasing, albeit at huge cost to manufacturers in terms of market support,' SMMT chief executive Mike Hawes commented.
'It is always dangerous, however, to draw conclusions from a single month, especially one as small and volatile as February.
'With the all-important March number plate change now upon us, and tax changes taking effect in April that will, perversely, dissuade EV purchases, we expect significant demand for these new products next month.
'But long term, EV consumers need carrots, not ever more sticks.'
The SMMT has already this year warned that the massive tax hikes for EVs introduced on 1 April will further stall demand for battery cars.
Hawes described it as 'the wrong measure at the wrong time'.
The SMMT said the growth in EV demand was 'unsurprising' as private buyers brought forward purchases. It saw 1,861 Tesla Model Ys (pictured) enter the road in February
Chancellor Rachel Reeves in her Autumn Budget statement confirmed that tax exemptions for electric cars will end in 2025
From 1 April, owners of electric vehicles will have to start paying car tax the same way as drivers of petrol and diesel cars do
Until now, one of the big benefits of electric vehicles is the financial incentives that have come with them.
Amongst the biggest of these has been VED exemption.
However, that will change from April when owners of zero emission vehicles will have to start paying car tax the same way as drivers of petrol and diesel cars do.
During his Autumn Budget statement in November 2022, then-Chancellor Jeremy Hunt told MPs: 'Because the OBR (Office for Budget Responsibility) forecast half of all new vehicles will be electric by 2025, to make our motoring tax system fairer I've decided that from then, electric vehicles will no longer be exempt from vehicle excise duty.'
Despite the OBR's previous projections for EV sales being wide of the mark - in 2024 accounting for just 19.6 per cent of all registrations - the Labour party will push ahead with Hunt's changes and subject those driving zero emission vehicles to car tax.
Here's how EVs of different ages will be impacted by the new rules...
New EVs registered on or after 1 April 2025
Buyers of new EVs will pay £10 for first-year showroom VED.
From the second year after registration, these EVs will be subject to the same standard rate of VED as internal combustion engine cars.
This will increase with RPI (Retail Price Index) inflation. Currently, the standard rate of car tax is £190 but will rise to £195 from April.
EVs registered between 1 April 2017 and 31 March 2025
Owners of existing EVs registered between 1 April 2017 and 31 March 2025 - electric cars that have until now evaded VED costs - will be forced to pay the full standard VED rate of £195 from 1 April.
EVs registered between 1 March 2001 and 31 March 2017
Even early adopters of electric cars won't avoid the tax sting.
EVs registered between March 2021 and April 2017 will be subject to the lowest VED brand costing £20.
This will only impact a small volume of drivers, given EVs were relatively rare in these years and very much in their infancy.
'Tesla tax': £40,000-plus EVs to also be stung by expensive car supplement
New EVs from 1 April 2025 will also be subject to the 'expensive car supplement' levied on all models with an on the road price of £40,000 or more.
It has been referred to as the 'Tesla tax' because no vehicles sold by the American EV-maker are priced below the supplement's threshold, which has remained unchanged since it was set eight years ago.
The DVLA confirms: 'New electric and zero emission vehicles registered on or after 1 April 2025 with the list price exceeding £40,000 will attract the standard rate, plus the expensive car supplement for the first 5 years from the start of the second licence.'
On top of the standard VED rate of £195 paid from the second year following registration, owners of £40k-plus EVs registered after 1 April 2025 will also have to pay the additional premium rate, which is due to jump to £425 from 1 April.
As such, drivers of EVs that cost more than £40,000 - who currently pay zero car tax - will be stung £620 per annum in VED from the second year of ownership.
It will impact a significant proportion of the EV market.
Car magazine Auto Express estimates that seven in ten battery cars registered in the UK are priced above £40k and therefore eligible to be levied with the ECS, which it says will 'create further cost barriers for drivers looking to transition to EVs'.
While there are numerous electric cars priced below the £40,000 additional tax threshold, the inclusion of optional extras requested by customers when new will likely push some of these vehicles into the ECS bracket.
Even when buyers negotiate deals with dealers to get EVs for a discounted rate, this isn't taken into account by the DVLA, which strictly uses the recommended retail price (RRP) with the options included to determine if a vehicle is subject to the premium tax rate.
Some car makers have already responded by cutting the RRPs of their EVs to sit below the ECS threshold.
Italian car maker Abarth - the sporty spin-off brand of Fiat - has slashed the price of one of its most expensive electric vehicles to help customers dodge Labour's impending EV tax sting from 1 April...
Auto Express last years estimated that seven in ten new electric vehicles will be subject to the expensive car tax because most EVs cost over £40,000
Abarth, the sporty arm of Fiat, has trimmed the price of its new 600e Scorpionissima to 'ensure future customers will avoid the electric car supplement,' it said in a statement last month.
Originally costing £41,975, the range-topping EV's on the road (OTR) price has been cut back by £2,100 to £39,875 to ensure it sits below the £40,000 ECS ceiling.
The standard Abarth 600e’s OTR pricing will remain at £36,975, comfortably below the £40,000 threshold.
Giuseppe Cava, UK managing director for Fiat and Abarth, said: 'Recognising that our top-of-the-range Abarth 600e Scorpionissima would have attracted the Expensive Car Supplement coming in April, we’ve made the decision to reduce the price of the car and protect our customers from this tax rise.'
Existing electric car owners can cheat Labour's sting on EVs introduced from 1 April 2025. Here's how...
Already own an EV? Here's how to cheat Labour's car tax sting for 12 months
For existing owners of EVs set to be stung £195 for VED for the first time from April, there is one way you can avoid Labour's car tax rules this year.
Savvy drivers can take advantage of the current VED exemption for zero-emission cars by taxing their battery vehicles before 1 April at no cost.
Motorists can tax their car any month they want, no matter when their annual taxation is due to expire.
For EV drivers - who currently enjoy VED-free driving - they will incur no additional cost if they tax their car by 31 March, even if their current taxation period isn't due to end for months.
By re-taxing their EV online - using the car's registration number and reference number of the V5C log book - before 1 April, drivers of battery cars can enjoy free taxation for the following 12 months and avoid Labour's hikes until March 2026.
For all EV owners, this will save them paying the standard rate of tax of £195 at least for another year.
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