The electric vehicle transition is something we have seen grow over the past few years. However, recent figures from January are not showing much change in demand for electric vehicles compared with last year. It’s not a big drop, but it’s also not moving forward and that in itself is worth paying attention to.
The UK’s move to electric vehicles is now entering a tougher phase. With targets approaching, the choices made this year will determine whether adoption keeps growing or starts to stagnate.
We saw a healthy increase in EV adoption, especially among businesses over the last few years. At the time, it was cheaper to go electric, with low running costs and the tax system making cleaner vehicles more affordable. Benefit-in-Kind tax remained very favourable for businesses, and schemes like salary sacrifice were available, though private buyers saw much smaller advantages.
Rising Benefit-in-Kind tax, higher charging costs, and the removal of incentives like no road tax have eaten into earlier advantages, and while the government’s Electric Car Scheme offers grants to make EVs more affordable, uncertainty and changing rules are still softening demand and undermining confidence.
This uncertainty extends to the used EV market, where steep depreciation is costing billions and undermining confidence. The used market affects the affordability of new vehicles and the business models of fleets, leasing, and rental providers. Data from We Buy Any Car shows an average EV loses around 40% of its original value in one year and 50% by two years. Petrol, diesel, and hybrid cars retain over 65% at one year and 60% at two. Lower resale values hit private buyers and businesses alike, making adoption slower across both private and fleet markets.
Charging infrastructure is another barrier. Home charging works for many, but drivers without off-street parking face limits in access to reliable and affordable charging. While the network has grown, with 45,242 locations and 88,513 points according to Zapmap, public charging remains expensive and unevenly distributed. For drivers dependent on public charging, the financial advantage of going electric is shrinking, as higher electricity costs and standing charges, up around 450% since 2021, cut into potential savings.
The van market faces similar challenges. Electric vans currently make up around 10% of registrations, against a 24% target, meaning demand must more than double to stay on track.
Electric vans currently make up a small share of registrations and are clearly behind cars in the transition to electric. Growth is slower than expected, range is more limited, and model choice is narrower, which makes switching to electric vans more challenging for many businesses. While incentives exist, the overall market is still adjusting, and adoption is not moving as quickly as it needs to if government targets are to be met.
As of April 2025, electric vehicles became subject to Vehicle Excise Duty and the expensive car supplement. EV drivers are now facing higher costs than equivalent petrol or diesel vehicles, which takes away some of the financial advantage of going electric. At a time when the market is still trying to build long-term confidence, this raises further concern.
Some of the incentives that originally helped drive growth were reduced or removed too quickly. When the market was still developing, that may have taken away some of the momentum. Rising costs, additional taxation and mixed messaging have only added to the uncertainty.
There is a growing sense that taxation, regulation and infrastructure are not fully aligned. When policy moves in different directions, it becomes harder for consumers and businesses to plan ahead with confidence.
Incentives like the Electric Car Grant are a step in the right direction, but they do not go far enough to really shift wider demand.
Pressure is building from all sides to cut emissions, to make EVs affordable, and to keep businesses moving. The UK still has a chance to lead the shift to zero-emission transport.
But it won’t happen just by setting targets. What matters now is making the transition practical, predictable and joined-up. Taxation, incentives, infrastructure and regulation all need to work together so people and businesses can have confidence to make the switch.
The ambition is still there. The technology is ready. What’s needed now is the right environment to turn that into real momentum.
