The UK Government has said it is now seeking views on how to restore the 2030 phase out date for new purely petrol and diesel cars and ‘make the transition to zero emission vehicles a success’.

The consultation proposes updates to the Zero Emission Vehicle (ZEV) Mandate. The mandate sets out the percentage of new zero emission cars and vans manufacturers will be required to sell each year up to 2030.

Fines are in place for OEMs on the basis of cars sold that fall short of ZEV share targets on sales (see below details). The application of the Zero Emission Vehicle (ZEV) Mandate has been widely criticised in the industry because of slower than expected demand for electric vehicles, which means the likelihood of large fines.

The UK Government points out that the ZEV Mandate already features a range of flexibilities to help industry comply in a way that makes sense for them and the wider market, including selling fewer zero emission vehicles than the headline target if they make up for it in other ways. The consultation ‘explores the design of the flexibilities to ensure they continue to support manufacturers’.

However, the UK Government appears to be sticking to the 2030 target. It said the consultation is ‘focused on how, not if, we reach the 2030 target’. It said it will give the sector the opportunity to consider how the current arrangements and flexibilities are working, which hybrid cars can be sold alongside zero emission models between 2030 and 2035, and any further support measures to help make the transition a success for industry and consumers.

The UK’s auto industry trade association – the SMMT – has called for more incentives to encourage electric vehicle take-up.

In response to the latest consultation announcement, Mike Hawes, SMMT Chief Executive, said: “The automotive industry welcomes government’s review of both the end of sale date for cars powered solely by petrol or diesel, and possible changes to the flexibilities around the Zero Emission Vehicle Mandate. These are both critical issues for an industry that is facing significant challenges globally as it tries to decarbonise ahead of natural market demand.

“Aside from the billions invested in new technologies and products, it has cost manufacturers in excess of £4 billion in discounting in the UK this year alone. This is unsustainable and, with the 2025 market looking under even greater pressure, it is imperative we get an urgent resolution, with a clear intent to adapt the regulation to support delivery, backed by bold incentives to stimulate demand. Such action will support not only the industry, but also deliver for the economy, consumer, government and the environment.”

The UK’s ZEV Mandate – how it works

The UK Government’s Zero Emission Vehicle (ZEV) Mandate targets EV share numbers and will fine OEMs for non-compliance.

The industry now expects the UK’s BEV car market share to be 18.7% in 2024, although a strong December performance could raise that to 19% – still, however, short of the 22% mandated target for the year.

Manufacturers that fail to meet the compliance levels or do not sell enough ZEVs face penalties of GBP15,000 (USD20,000) for every non-ZEV unit sold over their mandated allowance. There is an option to buy ‘credits’ from manufacturers exceeding the share target (for example from BEV-only makers such as BYD or Tesla), but volume OEMs argue that means they are effectively subsidising their competitors.

The UK Government has said it will talk to the industry about how the ZEV Mandate works – suggesting there could be some flexibility in its application to help the industry. However, it has also said it wants to keep to the overall targets as part of the UK’s net zero commitments and to maintain the phasing out of petrol and diesel only powertrain vehicle sales by 2030.

When the UK’s ZEV mandate was unveiled, the industry anticipated that 457,000 electric cars would be registered in 2024, which should have accounted for 23.3% of all new car registrations. However, the SMMT said the latest outlook shows 94,000 fewer cars will be registered, totalling just 363,000 with a market share of 18.7%. The situation is even worse for vans with the outlook halved to just 20,000 units expected to be registered this year, a 5.7% market share against a 2024 ZEV Mandate target of 10%.