Diesel registrations fell by 24.4 per cent last month while demand for petrol grew 20.1 per cent, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT).
Alternatively fuelled vehicles saw an uplift of 21 per cent, with market share of hybrids and plug-ins reaching a record 6.5 per cent.
Growth was particularly strong for plug-in hybrids, up by a third (33.5 per cent), while hybrid registrations grew 17.5 per cent, followed by battery electric cars, up 2.4 per cent.
163,898 new cars were registered in the month as the market stabilised following a turbulent first six months.
Overall, the UK new car market remained stable in July, with year-on-year demand growing by 1.2 per cent.
Mike Hawes, SMMT chief executive, said: “The feel-good factor from a sun and sport-packed July, combined with some fantastic deals on a raft of exciting new models, clearly helped keep showrooms relatively busy last month.
“It’s great to see alternatively fuelled vehicles benefiting from this growth, and government’s acknowledgement of the vital role new-tech diesel will play in its Road to Zero strategy should help more even more motorists benefit from the latest, safest and low emission technology over the coming months.”