UK electric car registrations are set to reach 580,000 units in 2026, which is 29% of all new car sales, according to new forecasts released by EV leasing firm DriveElectric. The projection is based on an increase from 2025, when the share of electric cars in new registrations was 23.4%, or 473,348 vehicles. While December 2025 saw electric vehicles accounting for a higher monthly share of 32.2%, the full-year market share in 2026 is projected to increase by 5.6 percentage points. Electric vans and ZEV compliance dynamics Beyond passenger cars, electric light commercial vehicles (ELCVs), primarily electric vans, are expected to experience faster growth. DriveElectric estimates that electric van registrations will rise by 50% in 2026 to around 45,000 units, up from approximately 30,169 in 2025, when ELCVs represented a 9.5% share of the van market. The firm attributes the increase to technological improvements that have broadened the appeal of electric vans for business use, including one-tonne payload capacities becoming more common and real-world driving ranges exceeding 200 miles. The expansion of electric van sales plays a big role in overall manufacturer compliance with ZEV requirements. Under the mandate, electric van registrations are counted as double credits toward compliance targets. While headline electric car sales are projected to remain below the 33% average in 2026, the additional weighting of ELCVs is expected to help manufacturers meet overall obligations. Similar flexibilities allowed manufacturers to exceed ZEV targets in 2024, and DriveElectric expects a comparable outcome in 2025. Pricing, incentives, and charging infrastructure The forecasts provided by DriveElectric are based on its own market intelligence model of the UK market, as well as aggregate pricing, policy, and infrastructure variables. There has been an increase in the availability of more affordable electric models, especially in smaller segments, which has reduced the price difference between electric and petrol and diesel-powered vehicles. The Electric Car Grant, which gives a discount of £1,500 or £3,750, based on the vehicle’s manufacturing sustainability, is a key factor in determining the price. However, manufacturer incentives are also available on models that are not eligible to receive the grant. The UK market has seen wider access to electric vehicles, with the introduction of new brands and increased competition. The reduced cost of batteries has also contributed to overall competitive pricing, with increased vehicle range and faster charging speeds being offered, while limiting the vehicle’s functionality due to its daily usage. Fleet demand and the used EV market The growth of electric vehicles has been driven by business adoption. The uptake of company cars is still supported by Low Benefit-in-Kind tax rates on electric cars, which are currently at 3% until April 2026 and increase by one point every year to 5% by April 2028. The use of salary sacrifice schemes has also grown, with it being estimated that up to 40% of the costs of driving employees can be saved. To businesses, electric vehicles are being increasingly incorporated into carbon reporting systems, which can impact their ability to secure contracts. Meanwhile, the market of used electric vehicles in the UK is expanding as the overall registrations rise. With over 1.8 million electric cars already registered in the country, the supply in the second-hand market has increased, creating demand for used EV leasing in business and personal contract hire, as well as salary sacrifice schemes. If you're reading this, you’re already ahead. Stay there with our newsletter .
