Automotive market update – September: Electric grant boosts market

Welcome to the second in our new series of monthly market insight articles, 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 adoption, plus our vehicle leasing insights.

September market summary

Fully electric and plug-in hybrid vehicles helped the September new car market hit more than 312,000 sales, up 13.7% on the same month last year.

Fully electric cars accounted for almost a quarter of the new car market (23.3%) in the first 75-plate month. The September 2025 hike in sales has pushed the year’s running total to 4.2% above the same point in 2024. It was the highest ever monthly volume recorded for electric cars.

As well as electric cars increasing in popularity, new entrant brands also performed strongly. The Jaecoo 7, a mid-size SUV with styling reminiscent of a small Range Rover, scooped fourth best seller in the year’s second biggest month.

Electric Car Grant boosts EV interest

Plug-in cars, either full battery electric vehicles (BEVs) or plug-in hybrids (PHEVs), accounted for well over a third (35.5%) of new car sales in September.

The increase in plug-in cars was helped by the Government’s new Electric Car Grant (ECG). September’s 312,891 car total means the January to September total is now 1.58 million new cars, up 4.2% on the first nine months of last year.

While BEV sales continue to grow and take an increasing proportion of the new car market, according to the Society of Motor Traders and Manufacturers (SMMT), PHEVs are increasing in popularity at an even greater rate. PHEVs are up 38.2% so far in 2025 and were up a huge 56.4% in September. In fact electrified cars took the majority of car registrations in September.

The marked step up in EV registrations has been accredited, in part, to the Electric Car Grant, according to the SMMT. However, the organisation added the Electric Car Grant on its own would not be enough to persuade all new car buyers to go electric.

Commenting on the figures Mike Hawes, SMMT chief executive, said:

"The Electric Car Grant will help to break down one of the barriers holding back more drivers from making the switch – and tackling remaining roadblocks, by unlocking infrastructure investment and driving down energy costs, will be crucial to the success of the industry and the environmental goals we share."

New car registration trends by fuel type

Petrols and hybrid petrol cars took 60.5% of the market in September, three years ago that proportion was touching 70%. Diesel, once loved by company car drivers, accounted for just 4% of new car sales in September.

Fleet and business registrations still dominate the new car market with September seeing this sector account for 58.1% of sales. This was fractionally up on the 56.3% figure from a year ago. The uptick in fleet sales is reflected in our sales at Gateway2Lease where we are seeing increasing interest from fleets and businesses.

Best selling cars in September

For a brand that launched less than a year ago to have a car in the top five best-sellers’ list is unheard of. However, that’s exactly what Chinese new entrant Jaecoo has done with the Jaecoo 7 mid-size SUV. In September it outsold cars such as the VW Golf, Vauxhall Corsa and Volvo XC40.

Kia’s Sportage, which has recently been significantly updated, took first in the best-sellers list for the month. The Sportage sits second in the year-to-date chart behind the Ford Puma – a reversal to the September listing.

Expect the Kia to have a strong finish to the year as not only has it been facelifted, but the brand is still selling some versions of the older model.

The UK’s top 5 models in September

1. Kia Sportage
2. Ford Puma
3. Nissan Qashqai
4. Jaecoo 7
5. Vauxhall Corsa

Source: SMMT

Gateway2Lease’s top 5 ordered models in September

1. Volvo XC60 PHEV
2. MG HS PHEV
3. Tesla Model 3
4. Ford Puma Gen-e
5. Tesla Model Y

Looking ahead to October

As we enter the final few months of the year, car manufacturers are increasing their offers, particularly on battery electric cars, to make sure they hit all-important, and government mandated targets, potentially offering increasingly attractive lease rentals.

Read our August 2025 market update here.