2025 Unwrapped: What’s ahead for the EV market in the new year

As we enter 2025, SMMT’s November data reports a 17.9% year-on-year increase in battery electric vehicle (BEV) registrations, with plug-in hybrid electric vehicles (PHEVs) experiencing a 19.6% growth. Despite maintaining a 52% market share in 2024, petrol vehicles are gradually slowing, with a decline of 3.2% year-on-year.

Drawing on insights from Adam Hall, our Director of Energy Services, and Naomi Nye, our Head of Sales, let’s explore what next year has in store for the EV market.

Fleet electrification will continue to dominate EV adoption

The Department for Transport reported that businesses accounted for 80% of PHEV registrations and 83% of BEV registrations in the first half of 2024. One in five (21%) new company-owned cars during that period were electric, aligning closely with the Zero Emission Vehicle (ZEV) mandate targets.

“This is great news for the EV fleet industry,” Naomi adds. “At Drax, we are committed to continue supporting businesses across the UK with their electrification goals, from consultancy to infrastructure deployment, making the transition seamless.”

However, the latest car registration data shows that fleets are the only group to see growth in new registrations, increasing by 12.9% year-on-year. Meanwhile, private and business registrations have fallen by 9.1% and 4.2%, respectively.

“The ZEV mandate sets ambitious sales quotas for electric vans and cars,” says Naomi Nye. “It’s a driving force behind the rapid pace of fleet electrification, compelling manufacturers to scale up their supply of electric light commercial vehicles (e-LCVs) and cars to meet demand and avoid penalties. This should continue to increase the availability and variety of EV models across the board for fleets.”

The need for greater certainty in 2025

Regulatory clarity will be crucial, yet the ZEV mandate, initially set for 2030, has been reopened for consultation, creating uncertainty for businesses. Adam Hall emphasises how this back-and-forth can hamper confidence in the long-term investments needed for fleet electrification.

“Electrification is a significant commitment for UK organisations,” Adam explains. “They need unwavering regulatory support and market confidence to invest in EVs and the necessary charging infrastructure.”

Drax’s Driving Change Report 2024 highlights this need. Lack of government support was identified as a key barrier for 26% of respondents considering fleet electrification, with one-third unaware of available EV grants and financial incentives.

“Making these incentives accessible and visible will be crucial to achieving the UK’s 2030 electrification targets,” Adam stresses.

Further progress is coming for electric vans and HGVs

While electric cars often dominate headlines, Naomi highlights that 2025 could be a breakthrough year for advancements in electric vans and heavy goods vehicles (HGVs).

“Historically, commercial van EV adoption has lagged because available models haven’t met operational needs,” Naomi explains. “However, with new and more capable options entering the market and regulatory deadlines looming, adoption is set to accelerate.”

As for electric HGVs, there are currently a few hundred now on UK roads. The sector remains in its infancy compared to over 400,000 diesel-powered trucks (approximately) that dominate the landscape.

The UK government is actively funding trials for zero-emission HGV projects to drive forward this industry, addressing challenges like range and infrastructure requirements. “These developments are pivotal,” says Naomi. “They will demonstrate the feasibility of electric HGVs and hopefully make fleet electrification more accessible to a wider range of sectors.”

Looking ahead, collaboration is key. Naomi highlights, “To truly decarbonise, we need more than just technology. We need the industry to work together to overcome barriers, from operational challenges to alternative fuels.” By integrating solutions that improve both infrastructure and driver satisfaction, the UK can accelerate its journey toward zero-emission logistics.

Tailored electrification solutions are essential

There’s no one-size-fits-all to electrification. Naomi stresses the importance of customised strategies: “Different businesses, spaces, and locations have unique requirements. A shopping centre serving tens of thousands daily will need vastly different solutions than a small office-based fleet.”

Bespoke electrification strategies should recognise that understanding an organisation’s operational requirements is crucial to developing a suitable plan. Naomi emphasises that comprehensive services like vehicle selection, charging infrastructure installation, and ongoing charge management are vital to ensure UK businesses’ needs are considered and met at every step.

“The future of EVs requires tailored, end-to-end solutions that suit unique needs. This is exactly what we strive for at Drax Electric Vehicles when supporting businesses with seamless strategies and simplifying their electric journey,” Naomi adds. “We leverage advanced data analytics to optimise fleet performance. Our team ensures an agile approach to planning and scalability for businesses managing diverse vehicle requirements. For decision-makers to feel confident in their efforts, long-term sustainability and immediate needs must be balanced.”

Public Charge Point Regulations push for a higher-quality charging network

Starting in November 2024, Charge Point Operators (CPOs) are now required to maintain a 99% uptime across their networks, provide 24/7 customer support, and publish reliability data. Contactless payment options are now mandatory for all rapid chargers of 50kW or faster, as well as new installations at 8kW or more, with transparent pricing and, by November 2025, compatibility with roaming services. Non-compliance may result in fines of up to £10,000.

These regulations are designed to enhance consumer confidence by ensuring a reliable and user-friendly charging experience. However, there are concerns that introducing regulations post-innovation may force some operators, particularly those with lower-capacity chargers, out of the market.

A Freedom of Information (FOI) request to 210 British local authorities, carried out by Drax Electric Vehicles in 2024, also highlighted challenging issues that prevail. Over two-fifths of respondents (42%) that shared compliance status reported obstacles in meeting the regulations. These included technical complications with contactless payments for existing charge points, limited funding for infrastructure upgrades, increased associated costs, and the complexity of effective reliability monitoring and staffing for helplines.

"While compliance isn't universal yet, the local authorities’ transparency and engagement in tackling these issues are commendable," said Naomi. "The data shows determination and momentum as councils strive to create a robust, accessible charging network."

As the phase 3 PCPRs deadline approaches in 2025, Adam Hall calls for ongoing collaboration between councils, the private sector, and the UK Government. Transparency about progress and barriers will be crucial for overcoming current challenges and planning for future growth in EV infrastructure.

Adam emphasised, "Achieving full compliance is just the start. Councils and policymakers must focus on long-term planning and future-proofing EV infrastructure. By addressing today’s challenges with collaborative solutions, we can create an inclusive and resilient charging network for the nation."

Charging infrastructure is expanding, but destination charging must keep up

The UK government’s target of 300,000 public charge points by 2030 demands rapid progress in expanding infrastructure. However, gaps remain, especially in rural areas and destination charging sites like hotels.

Naomi highlights the growth opportunities here for 2025: “Destination charging, particularly at hotels, shopping centres, and leisure sites, lags behind public and workplace charging. However, it represents an untapped market that could give businesses a competitive edge while enhancing EV accessibility across the country.”

Workplace charging is another bright spot. Drax’s Driving Change Report 2024 found that almost half of UK employers have installed EV chargers, and a third planned to make further investments in the following 12 months.

Naomi notes that the UK is also making strides in developing public charging infrastructure, but more must be done in the coming years. Financial support and simple access to funding are especially important. “Back in 2023, the £381m Local Electric Vehicle Infrastructure (LEVI) fund and £15m On-Street Residential ChargePoint Scheme (ORCS) were announced to support thousands of new charger installations. Whilst Labour has made no changes so far, Drax’s recent FOI request revealed that local authorities still report financial issues with upgrading and expanding public charging in 2024,” says Naomi.

In recent years, collaboration between the public and private sectors has grown to boost infrastructure expansion. Naomi confirms that this trend will likely continue in 2025.

Demand-side response is key for the electric future, but often forgotten

For the UK energy grid to run smoothly, electricity supply and demand must match in real time. Any imbalance can lead to blackouts or damage to infrastructure, as the grid operates at 50Hz, where even a small fluctuation of 0.2% can cause major disruptions.

Adam Hall explains, “This challenge is increasing with the growing use of renewable energy, which depends on favourable weather conditions. However, demand-side response (DSR) solutions will be the future of balancing supply and demand by optimising the use of electric assets.”

EV fleets hold a unique position because these vehicles often remain plugged in for extended periods, particularly overnight, when demand is lower. “This predictable and controllable charging pattern makes for the perfect participant in DSR initiatives, contributing to grid stability while reducing fleet costs.”

Adam notes that fleets don’t have to navigate DSR markets on their own. “With a trusted partner, you can access DSR markets with ease. We strategically align your business requirements with market insights to build the optimal strategy,” Adam shares. “Previously, we supported Ford and FI Real Estate Management to reduce their collective power demand, including optimising their EV fleets. This additional flexibility helped balance supply and demand amid the energy crisis caused by Russia’s invasion of Ukraine.”

Public perceptions of EVs are warming

“Research indicates a significant increase in EV interest and support,” Naomi observes. “However, it’s important to continue providing simple guidance and combating misinformation, as many businesses and consumers are still beginning their journey.”

The 2024 National Travel Attitudes Study revealed that almost 2 in 5 respondents (37%) rated their EV knowledge as high. Industry bodies like Charge UK are unified in raising public awareness of the benefits of EV adoption to continue growing positive attitudes towards EVs.

Naomi also noted, "The survey also found that almost half of respondents (49%) planned to buy a BEV or PHEV for their next car. With increased accessibility to affordable EV models, public acceptance will grow."

The final outlook for 2025

As the new year approaches, the EV industry is poised for another interesting period. From regulatory updates to technological breakthroughs, the stage is set for fleets and businesses to drive growth. Naomi Nye and Adam Hall remain confident that organisations can seize the opportunities ahead for the electrified future with proper support and tailored solutions.