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The UK new car market saw year-on-year growth in March, with more EVs registered than ever before.
However, the Society of Motor Manufacturers and Traders (SMMT) said that the share of the overall market taken by EVs had actually fallen compared with March 2023, and warned this was a sign that more support was needed for electrification.
Fleet demand is still proving key both to EV sales and overall market growth, with a 10.4% growth in overall new car registrations in March driven by a 29.6% rise to the fleet sector.
Private registrations were down by 7.7% year-on-year, and business registrations, classed as those to firms with fewer than 25 vehicles, down by 8%.
The total of 317,786 registrations was the highest seen in March since 2019 - but still 30.6% below pre-pandemic levels.
In terms of fuel mix, a 3.8% year-on-year rise in EV registrations - something the SMMT attributed to fleet demand motivated by tax incentives - saw a total of 48,388 hit the road, but this was only enough for a 15.2% overall market share, down by 1% compared with March 2023.
Plug-in hybrids saw strong growth last month, up by 36.7% year-on-year for a 7.7% market share, while conventional hybrids were up by 19.6% for a 14% market share.
Petrol registrations were up by 9.2% for a 55.7% market share, while diesel registrations were down by 2.7%, taking 7.3% of the market.
Regarding the EV transition, the SMMT said that manufacturers were offering their own 'generous' incentives, but that these could not be sustained indefinitely.
It said a full market transition would need incentives for retail buyers as well as fleets, with suggestions including temporarily halving VAT on BEVs, revising the threshold for the expensive car supplement on Vehicle Excise Duty next April, and equalising VAT on public and home EV charging.
SMMT chief executive Mike Hawes said: "Market growth continues, fuelled by fleets investing after two tough years of constrained supply. A sluggish private market and shrinking EV market share, however, show the challenge ahead.
"Manufacturers are providing compelling offers, but they can't single-handedly fund the transition indefinitely.
"Government support for private consumers - not just business and fleets - would send a positive message and deliver a faster, fairer transition on time and on target."
Reacting to the March sales figures, Novuna Vehicle Solutions managing director Jon Lawes said: "The new plate month inevitably sparks strong take-up of zero-emissions vehicles, yet the transition is in danger of stalling without addressing the fundamental barriers to EV adoption, particularly after a lacklustre Spring Budget.
"Achieving the ZEV mandate will prove increasingly difficult unless support measures for private buyers to make the switch are introduced, coupled with the sustained rollout of EV charging infrastructure which remains unfit for purpose."
Lex Autolease managing director Nick Williams said: "While market share fell in March, I still believe this will be a pivotal year for electric vehicle adoption. With the 2024 ZEV target and tough competition from Chinese rivals bearing down on carmakers, many are reimagining their operations and creating partnerships to cut manufacturing costs and launch more affordable models.
"And we're seeing appetite among private drivers grow at the same time. Our latest Future of Transport report found that two thirds of 17 to 35-year-olds are planning to make their next car electric, and that far fewer see costs as a barrier compared to their parents' generation.
"While there's still strong demand from both industry and drivers for more action from government to speed up adoption, we expect to see significant market growth this year."
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