The UK new car market recorded its fifth consecutive month of growth in December, with an 18.3% increase to reach 128,462 new registrations, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

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This second half year performance was not enough, however, to offset the declines recorded during the first half of 2022. Despite underlying demand, pandemic-related global parts shortages saw overall registrations for the year fall 2.0% to 1.61 million, around 700,000 units below pre-Covid levels.

December saw battery electric vehicles (BEVs) claim their largest ever monthly market share, of 32.9%, while for 2022 as a whole they comprised 16.6% of registrations, surpassing diesel for the first time to become the second most popular powertrain after petrol. Meanwhile, plug-in hybrids (PHEVs) saw their annual share decline to 6.3%, meaning that combined, all plug-in vehicles accounted for 22.9% of new registrations in 2022 – a record high.

Hybrid electric vehicles (HEVs) also enjoyed growth, rising to an 11.6% market share for the year. As a result, average new car CO2 fell 6.9% to 111.4g/km, a record low.

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While private buyers accounted for more than half of all registrations, fleets and business buyers were responsible for the lion’s share of battery electric vehicles, accounting for two thirds (66.7%) of all BEV registrations and 74.7% of the volume gain in 2022.

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Last year, Britain reclaimed its position as Europe’s second largest new car market by volume, both overall and, specifically for plug-in cars. However, as of the end of Q3 2022, it was 13th overall by plug-in market share, behind markets including Norway (78.3%), the Netherlands (28.7%) and Germany (23.5%).

Mike Hawes, SMMT Chief Executive, said: “The automotive market remains adrift of its pre-pandemic performance but could well buck wider economic trends by delivering significant growth in 2023. To secure that growth – which is increasingly zero emission growth – government must help all drivers go electric and compel others to invest more rapidly in nationwide charging infrastructure. Manufacturers’ innovation and commitment have helped EVs become the second most popular car type. However, for a nation aiming for electric mobility leadership, that must be matched with policies and investment that remove consumer uncertainty over switching, not least over where drivers can charge their vehicles.”

Looking ahead, supply chains are beginning to stabilise and although the shortage of semiconductors is expected to ease, erratic supply will likely impact manufacturing throughout 2023.

GlobalData forecasts that the UK car market in 2023 will reach around 1.8 million. At that level, 2023’s UK new car market would still be around a quarter down on 2019’s 2.3 million sales.