Britons bought 156,500 new cars last month, up almost 12 per cent year-on-year and marking the strongest performance since before the pandemic.

The growth was driven by a sharp increase in EV demand, with new figures from the Society of Motor Manufacturers and Traders (SMMT) showing battery-powered cars reached another major milestone.

A total of 43,106 fully electric vehicles were registered in July, a 44.5 per cent increase on a year earlier. This saw EVs represent more than one in four (27.5 per cent) of all new cars delivered to customers.

That equates to roughly six new EVs entering Britain's roads for every new diesel car sold.

The boom has been aided by elevated fuel prices following conflict in the Middle East, the introduction of the Government's Electric Car Grant (ECG), continued manufacturer incentives and a growing range of lower-cost electric models.

However, despite the record performance, the industry says EV sales remain some way short of the Government's mandated 33 per cent market share target for 2026.

Mike Hawes, SMMT chief executive, described the latest figures as a 'great achievement' that 'reflects industry's huge investment in zero-emission mobility'.

However, he warned manufacturers cannot continue funding demand through costly incentives.

Hawes says the Government now needs to 'urgently reform regulations' to make car manufacturing in Britain more competitive and to secure jobs and livelihoods that depend on the industry.

'The sector's commitment to decarbonisation is not in doubt, but its ability to remain viable and attract investment for an EV future is under intense pressure,' he went on.

While the annual growth rate was flattered by weaker EV demand last summer before the introduction of the ECG, uptake of other electrified models also accelerated.

Plug-in hybrid registrations increased by 33.6 per cent in July, while conventional hybrid sales rose 11.6 per cent.

The growth is being driven by a broader range of electrified cars entering the market, particularly from ambitious Chinese brands offering impressive technology and long driving ranges.

Often viewed as a stepping stone between petrol and diesel models and fully electric cars, modern hybrids are becoming an increasingly attractive option for motorists seeking lower running costs without making the switch to a pure EV.

Some now offer electric-only driving ranges of more than 70 miles, making them particularly appealing as fuel prices remain volatile.

In contrast, diesel sales declined by almost 18 per cent to less than 6,600 deliveries last month. Oil burners now represent one in 25 new car registrations in Britain.

Demand also shrank for petrol cars by 5 per cent. However, 62,800 registrations mean petrol cars still account for two in five models entering the road on a monthly basis.  

Ian Plummer, chief customer officer at Auto Trader, said: 'The new car market looks well on course for its best year since 2019 as strong competition between manufacturers improves affordability and draws consumers back into the market.

'Conflict in the Gulf has focused the minds of car buyers on lower-cost motoring options, meaning demand remains especially strong for electrified vehicles.

'For the first time, one in every two new car enquiries on Auto Trader in July was for a plug-in vehicle, showing they are now firmly a mainstream choice.'

The Ford Puma strengthened its grip on top spot in the UK sales charts with more than 3,500 registrations in July.

However, supply concerns remain after production of the crossover in Romania was temporarily halted amid the energy crisis affecting parts of Eastern Europe.

Meanwhile, Chinese brands continue their remarkable rise.

Jaecoo and its 7 SUV, dubbed the 'Temu Range Rover', was the fourth best-selling new car in Britain last month with 3,200 registrations, while the smaller Jaecoo 5 ranked seventh with around 2,500 sales.

The Chery Group - consisting of Omoda, Jaecoo and Chery - delivered a combined 12,117 vehicles in July - enough to outsell Ford.

Even more gobsmacking is the popularity of BYD; its 6,603 sales were higher than Mercedes, Vauxhall, Hyundai and Nissan.  

Among pure electric models, Renault's retro-inspired 5 hatchback was the UK's most popular EV in July, recording almost 1,800 registrations.