Automotive market update - December: New car sales hit two million in 2025, with December’s sales up 3.9%

Welcome to our monthly market insight article where we provide a snapshot of what’s happening in the UK automotive market. Each month, we highlight key industry updates and trends, including electric vehicle (EV) adoption, plus our vehicle leasing insights.

Here Managing Director Kelly Marshall gives her take on December’s performance.

What’s happening with new car sales in the UK?

The new car market ended 2025 on a positive note with registrations reaching two million for the first time since the Covid-19 pandemic, according to the latest data from The Society of Motor Manufacturers and Traders (SMMT).

Electric vehicle (EV) sales were one of the main drivers behind that, supported by the Electric Car Grant (with about a quarter of new models eligible for a discount of £1,500 or £3,750) and the growing popularity of Chinese car brands.

We’ve certainly seen customers willing to consider new brands, with Jaecoo, Omoda and BYD all proving popular to lease, alongside well-established volume manufacturers.

EV market share exceeded 28% for the first time in 2025

In December, EVs took a market share of 32.2%, second to petrol’s 39.4%. This is the third consecutive year in which EVs have recorded a high market share in the final month of the year.

Hybrids took a 12.6% share of the market in December, while plug-in hybrid electric vehicle (PHEV) sales grew 32.9% compared to December 2024, reaching an 11.6% market share in December 2025.

At Gateway2Lease the strong interest we have seen in EVs throughout the year continued in December thanks to low benefit-in-kind tax of just 3%, as well as the Electric Car Grant. EVs made up 58.6% of our total orders, including personal contract hire (PCH), business contract hire (BCH) and salary sacrifice through our partner, The Electric Car Scheme.

We expect EVs to remain attractive to lease in 2026 and will be supporting our manufacturer partners to accelerate zero emission uptake as they work towards increasingly ambitious Government targets.

What drove sales in December?

We saw a lot of competition in the market in December due to car manufacturers expanding their range of EVs and the zero emission vehicle (ZEV) mandate target.

That led to some strong offers from both traditional volume manufacturers and new entrants from China.

In fact, there were four models from Chinese car brands in our top 10 most popular cars in December, compared to two models in November 2025 and three in October 2025.

The MG HS, which is available as a petrol, mild hybrid, and PHEV, featured in both our listing and the UK’s overall best-sellers for December, along with the ever-popular Nissan Qashqai.

Gateway2Lease’s top 10 most popular cars in December

1. Kia Sportage
2. MG HS
3. Smart #3
4. BYD Seal
5. Dacia Spring
6. Jaecoo 5
7. Hyundai Tucson
8. Nissan Qashqai
9. Renault Scenic
10. BYD Sealion 7

The UK’s top 10 best-selling cars in December

1. Ford Puma
2. Tesla Model Y
3. Volvo XC40
4. MG ZS
5. Nissan Qashqai
6. Jaecoo 7
7. MG HS
8. MINI Cooper
9. Tesla Model 3
10. Nissan Juke