Electric vehicle sales in the UK are rising, but the move towards electrification is proving less straightforward than hoped. On one hand we see that record registrations in 2025 were driven by incentives and discounting. On the other hand policy signals from UK government remain mixed, as global competition intensifies. For example, alongside this UK development, Chinese EV manufacturers accelerate the pace, and gain market share. In contrast, established players struggle to respond at speed. These developments raise a challenge for the wider automotive industry around whether it can shorten the time to market fast enough to either become competitive or stay competitive. Bodo Philipp explains…

What the data says: Demand vs Ambition

According to recent data from The Society of Motor Manufacturers and Traders (SMMT) almost half a million new battery electric vehicles (BEVs) were registered during 2025. This figure accounts for more than the whole of 2021 and 2022 combined. Additionally, the SMMT points out that almost one in four buyers have gone electric with car purchases. But, it is also quick to suggest that, despite this, there is a gap between demand and industry ambition.

Moreover, in the run up to these SMMT figures, the British Government launched it’s the ambitious DRIVE35programme in July 2025. This initiative committed £2.5 billion over the next decade to support jobs and ensuring the UK remains at the forefront of zero-emission vehicle development (EVs). Later, in August 2025, the government introduced another scheme to encourage electric vehicle purchases. It provided consumers with access to £3,750 for the purchase of an EV.

However, these UK grants and incentives have since been somewhat dampened by an announcement from Rachel Reeves, Chancellor of the Exchequer, during her Autumn Budget 2025 announcement. The government confirmed the introduction of a new Electric Vehicle Excise Duty (eVED) from April 2028. Within this Electric Vehicle Excise Duty (eVED), a new mileage charge for electric and plug-in hybrid cars, will come into effect from April 2028.

This sends a mixed message for drivers. They will be expected to pay for their mileage alongside their existing Vehicle Excise Duty (VED). So, while there is ambition from UK government for consumers and businesses to adopt EVs; they are, essentially, also receiving discouraging and confusing messages from policy makers.

BYD overtakes Tesla

Alongside this domestic picture in the UK, the global manufacturing landscape is changing. China’s BYD has overtaken Tesla as the world’s leading EV seller.

For example, BBC reported recently that, “China’s BYD has overtaken Elon Musk’s Tesla as the world’s biggest seller of electric vehicles (EVs), marking the first time it has outpaced its American rival in annual sales,” adding that, “Tesla car sales dropped by nearly 9% in 2025 to 1.64 million vehicles sold worldwide, the carmaker said on Friday – its second consecutive year of falling car deliveries,” and that, “those figures placed Tesla behind BYD.”

This is significant as it demonstrates how Tesla’s sales are slowing, despite price cuts to key models. In comparison, BYD brings new models to the market rapidly at a lower price point, and at scale. This raises a question about who can reach the market fastest, and respond most effectively to any future challenges that may arise?

Improving time to market

Legacy manufacturers typically still take four to five years to bring a new vehicle from concept to showroom. Newer entrants, particularly from China, take around 18 to 24 months. That gap allows faster players to respond to changes in demand, regulation and pricing long before slower competitors can react.

The industry has invested heavily in digitisation to close some of the gap though. Software platforms, virtual engineering and AI-driven design are commonplace for many. However, technology alone is not delivering faster outcomes. Many manufacturers are attempting to layer new tools onto traditional operating models that were built for a different era – this adds complexity and slows development pace down dramatically.

Systemic change is needed to correct this. Function-oriented vehicle development demands new processes, different governance and a shift away from overspecification and rigid sequencing. Decisions must be made earlier. Collaboration must be enforced rather than encouraged. Organisations must accept new trade-offs between perfection and pace.

Conclusion

Although the SMMT’s figures demonstrate a positive uptick in UK EV sales, the recent differential in sales between Tesla and BYD globally demonstrates that discounting strategies can only get competitors so far. Additionally, policy flexibility can only soften the impact so much. And, as the BBC reporting suggests, competition across the globe between the East and the West is accelerating. So if the rest of the market – especially legacy manufacturers – want to keep up the pace with the likes of BYD, they need to address their time to market.