The UK government has announced a formal review of the Zero Emission Vehicle (ZEV) mandate, after mounting pressure from some leading auto manufacturers, who are pushing for relaxation of its core production targets.
Some automakers are warning of potential risks to jobs, investment, and vehicle production if the rules remain unchanged, while others have stressed the mandate’s importance in accelerating the global transition to carbon-neutral transport.
The debate raises significant questions about the long-term viability of the UK’s ZEV Mandate, and whether manufacturers will be able to meet the ambitious targets it lays out year-on-year.
In this article, we discuss whether the UK ZEV mandate is likely to change, given increasing pressure from vehicle manufacturers.
What is the ZEV mandate?
The ZEV mandate forms a cornerstone of the UK’s transition to net-zero carbon transportation. It sets annual targets for the percentage of zero-emission vehicles which must be sold by manufacturers, as a proportion of their total sales, reaching 100% by 2035. Companies who fail to meet these targets are liable for fines of £15,000 per vehicle sold over the limit.
Interestingly enough, the ZEV Mandate itself actually pushed back the UK’s Zero Emission Vehicle target, which previously stood at 2030 in pre-existing legislation. Despite this, its concrete targets have sparked debate between automakers and consumers alike, as to whether they’re achievable given the UK’s current trajectory for providing electric vehicle infrastructure.
For a full overview of the ZEV mandate, read our complete guide here.
Read more about the ZEV Mandate here
EV Sales in the UK: Are We On Track?
Electric vehicles have so far made up 18.1% of new car sales in the UK in 2024, with electric vans accounting for a smaller 5.6% share – according to the SMMT.
These figures, while promising year-on-year, fall short of the ZEV mandate’s targets – which stand at 22% of new car sales, and 10% of new van sales for this year.
Despite growth in EV adoption compared to 2023, petrol and diesel vehicles still dominate consumer buying habits, reflecting both infrastructure challenges and ongoing market hesitance.
Manufacturers have highlighted that achieving these targets will require significant incentives, infrastructure expansion, and government collaboration to increase the appeal and practicality of EVs.
James Fisher, CEO of Gecko Risk, the EV & AFV data experts, comments:
“Prestige makes and models have dominated EV sales this year, perhaps due to purchasing an EV being seen as more of a luxury than a necessity.
At Gecko, we are very interested to see how cheaper makes and models coming out of China impact EV take up, with a more environmentally conscious younger generation soon being able to afford to get behind the wheel of an EV.”
“Gecko’s data illustrates that new EV registrations have plateaued in 2024, compared to growth witnessed in recent years. However, with cheaper models now hitting the market, registrations could take off again in 2025.”
Why Are Manufacturers Pushing for Change?
Some automakers argue that the ZEV mandate’s concrete targets are posing new challenges for the industry, including the significant financial burden of any missed targets, and inadequate EV infrastructure to support consumer uptake.
– Costly Fines for Non-Compliance
The £15,000 penalties for every vehicle produced outside the threshold are viewed as excessive by many manufacturers, who propose providing more flexibility, particularly for upcoming years. Some argue that such fines could lead to less room for investment, and job instability for production plants which fail to reach the mandate’s targets.
– Lagging EV Infrastructure
Many manufacturers argue that a lack of accessible EV infrastructure, like charge points and battery recycling, is slowing consumer uptake of zero-emission vehicles. They warn that this could make it less feasible to hit the strict targets, particularly as the ZEV to ICE ratio increases in the coming years.
– Lack of Consumer Incentives to Transition
Automakers stress that more incentives need to be provided and subsidised by the government to encourage uptake of electric and zero-emission vehicles. Many feel that these incentives will not only make reaching the targets easier, but will in turn lead to more consumer confidence as drivers become more comfortable with EVs.
Will the UK Government Relax ZEV Mandate Targets?
When responding to the concerns raised by manufacturers, the government has been quick to rule out any fundamental changes to the ZEV Mandate targets. When asked on LBC Radio on about the potential for relaxation of the mandate, Transport Secretary Louise Haigh responded:
“There has been a downturn in demand on a global level, so we are absolutely in listening mode.
We want to discuss how the current situation is affecting [manufacturers], but we are not diluting our ambition.
I am meeting with a number of automotive manufacturers later in the week in order to discuss the challenges that they face on a global scale.”
ZEV MANDATE OFFICIALLY UNDER REVIEW
On the 27th November, the UK government officially announced it will conduct a formal review of the ZEV mandate.
However, the government has since announced a formal review of the mandate, promising a “fast-track consultation” to address some of the key concerns raised by manufacturers.
What this review will entail remains to be seen, but there’s no doubt manufacturers will retain hope that the targets and penalties might be eased, or more support may be provided to help them fulfil their obligations.
What support is currently available for manufacturers to produce more EVs?
Despite its stringent targets, the ZEV mandate does allow some leeway for manufacturers, in the form of both exemptions and temporary relief.
Manufacturers who produce fewer than 2,500 vehicles per year are totally exempt from the mandate until the end of 2029, even if they only produce ICE vehicles.
Car makers also have the ability to ‘borrow’ credits from future years, from overperformance in previous years, or even trade them with other manufacturers who have exceeded their requirement.
These allowances were put in place to help manufacturers reach the targets more sustainably, and provide some additional time for them to align their supply chains.
However, this month’s move highlights the real pressures manufacturers are facing, and their appetite for more collaboration towards fulfilling the mandate’s objectives, without compromising their business models.
Summary
Some leading auto manufacturers have this month urged the UK government to relax the ZEV Mandate targets. The mandate dictates how many electric vehicles manufacturers must now produce as a portion of their total sales, reaching 100% by 2035.
Some automakers have argued that limited consumer appetite is making it more difficult to reach the targets, and that the £15,000 penalties in place for non-compliance are excessive, and could lead to instability in the sector.
However, Transport Secretary Louise Haigh has stressed that there will be no compromise on the government’s ‘ambition’, while also stating her intention to speak further with manufactures about their concerns.
Whether the ZEV Mandate remains in its current form for the long-term, or is subject to change, remains to be seen. Whatever the outcome, it’s clear that more collaboration is required between public and private organisations to increase consumer confidence, provide investment, and make the mandate more achievable.