Early prediction of hand function is crucial for efficient rehabilitation of cervical spinal cord injury (cSCI). This study investigated correlations between ulnar somatosensory evoked potentials (ulnar SSEPs) and functional outcome of hand function following acute traumatic cervical cord injury. Neurological assessment of sensory scores and hand function were compared with five ulnar SSEP categories of similar persistence and quality in 365 patients throughout the first year after cSCI. Of the 365 patients, 218 (68%) exhibited ulnar SSEP potentials at any one stage during the year, and in 147 patients (40.3%) ulnar SSEPs were obtainable at every assessment stage. While ulnar SSEP latency and amplitude assessments remained largely unchanged over time in the majority of patients, hand function improved remarkably during the first year following cSCI. One year outcome of hand function was predetermined by ulnar SSEP category due to distinct differences in the ulnar SSEP parameters. Additionally, an early prognostic group allocation by ulnar SSEP criteria at the first assessment stage within 4 weeks after spinal trauma allowed reliable prediction of hand function outcome after 1 year. We conclude that early assessment of ulnar SSEP as a non-invasive and objective neurophysiological test is a valuable marker of prospective hand function and independence 1 year after cSCI. This could be most relevant for planning neurorehabilitation, and in prospective clinical SCI trials.