The Government has announced changes to its Zero-Emissions Vehicle (ZEV) Mandate, answering the pleas of the UK automotive industry – but many observers are not convinced that the more flexible terms go far enough.

Confirmed by Prime Minister Keir Starmer on a visit to Jaguar Land Rover’s plant in Solihull, and clearly a direct response to the 25% tariffs on US imports announced by US President Donald Trump at the end of March, the relaxations will give manufacturer more flexibility over how they meet the requirements to transition to electric vehicles, with lower fines for missing those targets.

Firstly, what is the ZEV Mandate? Introduced by the previous Conservative Government, it is an attempt to speed up the journey yon the road to net zero emissions by decreeing what percentage of a manufacturers sales must be of zero-emissions vehicles each year.

In 2024, the first year, for cars the figure was 22%, by the end of 2025 28% and rising steadily to 80% by 2030, by which time sales of new internal-combustion vehicles – petrol and diesel – are set to be banned.

The Conservative Government started off with this date at 2040, eventually bought it forward to 2030 and then back to 2035 again, but since coming to power Labour has settled on 2030.

Manufacturers that don’t meet the targets were set to be fined a draconian £15,000 per car over, though at the start of the scheme there were various trading schemes available, with makers struggling to hit the mark able to ‘buy credits’ from those well on target, such as makers of all electric vehicles such as Tesla and Polestar. These trading schemes were due to last only to the end of 2026.

With no financial incentives on offer, however, for private buyers to invest in what are generally expensive electric vehicles, unlike in the fleet market for which EV users get serious tax breaks, the switch to electric has been stalling, with manufacturers forced to invest in unsustainable massive discounting to shift stocks of EVs to sceptical buyers.

The calls for changes to the mandate have grown louder, and the Government undertook a consultation at the end of 2025. Now we are seeing changes, though one does get the impression that the roll-out of them has been accelerated by the actions of the US President.

So what’s changed?

We cannot be over-specific on the changes just yet as quite a lot of detail on the new-look mandate is still to be revealed. But the headlines include;

• No change to the 2030 ban, but…
• All hybrid cars, full and plug-in, will be able to continue on sale until 2035 – previously it was suggested (but not detailed) that only those that achieved a certain all-electric mileage would have this dispensation, which would have spelt the end for full hybrids.
• Manufacturers will be offered various methods to achieve their targets – this including allowing the credit trading until 2029, underachieving in one year and making it up in following years, counting the contribution of hybrid sales as such cars generally have lower emissions, and for makers that produce both cars and vans (which have a different and lower level of ZEV mandate) balancing the figure across both sides, though to an agreed ratio, not like for like.
• Lower levels of fines for non-compliance, down from £15,000 to £12,000.
• An exemption for low-volume manufacturers such as Aston Martin, Bentley, McLaren and Morgan and foreign brands that sell less than 2500 vehicles annually.

The Government also announced £2.3 billion of funding to boost manufacturing of zero-emission vehicles and assist people in switching to EVs – again the exact direction of this funding is yet to be specified.

Mixed reactions

As mentioned much of the detail of the new mandate is still to be fleshed out and this will emerge in the coming days along with industry analysis of how much difference it is likely to make.

However some have reacted immediately to the Government announcement, and their response is decidedly lukewarm.

Mike Hawes, Chief Executive of the Society of Motor Manufacturers & Traders (SMMT) and someone who has never missed an opportunity to call for a relaxation of the mandate, said that the Government has rightly listened to industry, responded quickly to global dynamics and recognised the intense pressure manufacturers are under – but he added that growing EV demand to the levels needed would still require equally bold fiscal incentives to give motorists full confidence to switch.

“We await full details of the regulatory amendments but, given the potentially severe headwinds facing manufacturers following the introduction of US tariffs, greater action will almost certainly be needed to safeguard our industry’s competitiveness,” Hawes said.

“In this vastly changed world, a package of measures is needed to support manufacturing, especially the supply chain, so our industry can deliver the economic growth, jobs and investment the country needs,” he added.

Sue Robinson, CEO of the National Franchised Dealers Association, which has been lobbying on behalf of its members to have amendments made to the ZEV mandate for several years, welcomed the changes but called them “a step in the right direction for the UK automotive sector.”

Robinson dded that it is vital that more incentives are available to encourage the consumer to move to EVs; “The electric vehicle targets remain in place and the fines still remain too high for manufacturers – the UK remains the most aggressive regime for the EV transition and we would want the UK Government to align with the rest of Europe, in order to make our market as competitive as possible in a rapidly changing global marketplace.”

Adrian Fielden-Gray, Chief Operating Officer of national EV charging network Be.EV, described the Government announcement of “too much ‘stick’ and not enough ‘carrot’ when it comes to EVs,” arguing that the focus should be not on manufacturers but incentives for drivers making the switch to electric.

“Whilst there are references to £2.3bn and helping ‘working people’, we are crucially missing the detail of this – in practice, the EV driver keeps losing out,” Fielden Gray said.

“In the last few years, they’ve lost the home charging grant, they’ve lost purchasing grants, and most recently they’ve lost the exemption on vehicle excise duty.”

Fielden Gray added that by making EVs an obvious choice for consumers, rather than a mandated shift, the Government could increase the shift towards net zero and provide a revenue boost for British manufacturers.

More reaction to the ZEV Mandate will no doubt appear in coming weeks and Motor Trade News will report the latest developments.