New car sales in the U.K. reached the highest February figure in 20 years, boosted by companies buying electric vehicles for their fleets, even as private uptake of electrified vehicles (EVs) declined.

The Guardian reports that registrations of new cars climbed 14% year-on-year to 84,886 vehicles in February 2024, the best February performance since 2004, according to the Society of Motor Manufacturers and Traders (SMMT).

This brings the number of months of consecutive growth to 19, mainly driven by companies buying vehicles for use by their employees – a practice common in the U.K. and Europe, although not in the U.S. 

EVs recorded robust growth, with sales of hybrid electric vehicles rising 12.1% but taking a slightly smaller market share of 12.7%. Plug-in hybrids posted the largest growth for the month, rising 29.1% to reach 7.2% of the market. Battery electric vehicles (BEVs) also outpaced the rest of the market, rising 21.8% to account for 17.7% of registrations.

The SMMT said the long-term picture would become clearer in March, which is traditionally the busiest month for car sales.

The SMMT said a faster transition depended on more private buyers switching but that the lack of significant incentives was holding many back. It added that the government’s budget, released March 6, is an opportunity for the chancellor to stimulate demand by halving value-added tax (VAT) on new EVs for three years, amending proposed vehicle excise duty changes, and reducing VAT on public charging in line with home charging.

While consumers do not pay VAT on other emission-reduction technologies such as heat pumps and solar panels, private EV buyers pay the full 20% levied on all cars, whether they are electric, petrol or diesel.