Industry figures reveal that UK-wide demand fell by 1.6 per cent last month. Some 92,573 new cars were registered in August compared with 94,094 during the same month in 2018, the Society of Motor Manufacturers and Traders (SMMT) said.
Falling demand for diesel and plug-in hybrid vehicles continued to affect the overall market.
The market for battery electric cars more than quadrupled, while registrations for hybrid cars that cannot be plugged in grew 4.3 per cent. But the plug-in hybrid sector slumped 71.8 per cent.
UK government grants for new low-emission cars were slashed in October last year, meaning hybrid models are no longer eligible for the scheme.
SMMT chief executive Mike Hawes said: “August is typically the new car market’s quietest month so the huge increase in EV (electric vehicle) registrations is very visible but especially welcome.
“It’s great to see consumers respond to the massive industry investment made over many years. While this is encouraging, these figures also show the scale of the challenge ahead.
“It’s a long road to zero (emissions) and, while manufacturers can deliver the technology, they can’t dictate the pace of uptake.”
Private and fleet registrations fell 3 per cent and 1.5 per cent respectively last month, while the smaller business market was down 34.7 per cent.Sales of diesel models dropped 12.2 per cent but demand for new petrol cars nudged up 1 per cent.
James Fairclough, chief executive of AA Cars, said: “August sales are traditionally lower than other months, but that is to be expected ahead of new plates coming on 1 September.
“I think the true test of the health of new vehicle sales will come in the next few weeks, and all eyes will be on Britain’s forecourts to see whether September’s new plates will deliver the anticipated boost that everyone in the auto industry is hoping for.”
Alex Buttle, director of car selling comparison website Motorway.co.uk, added: “Although the car industry should rejoice in the positive boost in electric car sales, it can’t deflect attention from what was another fall in overall new registrations.
“The heightened prospect of a ‘no deal’ dragged heavily on registrations in August, as consumers continued to hold off on big ticket purchases.”
Sean Kemple, director of sales at Close Brothers Motor Finance, noted: "There’s no denying it’s been a tough year for the motor industry, which has suffered not just from the global slowdown and ongoing political turmoil but from sector-specific hurdles like WLTP and the demonisation of diesel.
"August’s figures were dragged down further by would-be buyers holding off for the new number plates in September.
"But it’s not all doom and gloom. In an ever more climate-conscious world, it’s heartening to see alternative fuel vehicles like electric and hybrid cars are on the up.
"The used car market has held strong in balance to its new counterpart, light commercial vehicle demand has seen half a year of consecutive growth, and September’s new plates should mean more good news for AFVs and small cars.
"This has prompted dealer confidence to bounce back from the lows of 2018. There are opportunities to build not just the bottom line, but the strong relationships with customers led by dealer insight and expertise, which are more important than ever in a volatile market."