What is the Zero Emission Vehicle (ZEV) mandate, and why should you care?

Since January 2024, car manufacturers have been required by law to meet sales targets for zero emission vehicles (ZEVs), under the government’s ZEV Mandate.

The mandate requires a rising percentage of individual manufacturers’ total annual sales to be zero emissions vehicles each year. The figures were reached after a lengthy consultation with the car industry and environmentalists, and a 22-per-cent-of-sales requirement for 2024 rises to 80 per cent by 2030 then 100 per cent by 2035. Targets for commercial vehicles are set lower, with only 10 per cent of new vans sold required to be electric this year, rising to 70 per cent by 2030.

2035 is therefore the currently effective date of the ban on sales of new petrol and diesel engined cars in the UK, which is aligned with many other global markets. However, the Labour government says it remains unambiguously committed to pushing the ban forward to 2030 as per its election manifesto commitments, reversing a postponement to 2035 implemented under the last government.

Billed as “the most ambitious regulatory framework for the switch to electric vehicles in the world” when announced by the Department for Transport (DfT)under the Tory government in 2017, the truth is the UK’s Zero Emissions Vehicle Mandate (ZEVM) has turned into a challenging political balancing act for the current Labour administration.

In the run-up to the election Labour campaigned vigorously on a promise to move the target forward again to 2030, arguing that without such a move the UK’s net zero carbon commitments can’t be met. 

Labour hasn’t yet made that change, and instead has been forced into an awkward review of the entire policy after car makers called the costs of ZEVM compliance unsustainable. Threats of cuts to UK jobs and investment have put competing pressures on the government, which now faces the unenviable prospect of trying to fulfil potentially incompatible pre-election pledges on both the environment and its support for industry, jobs and growth in the automotive sector.

When the ZEVM was launched, the DfT had comforting words for car makers. “We do not expect any manufacturers will need to be fined as there are a range of flexibilities including credits, banking, borrowing, trading, and conversion, after which final compliance payments are a last resort. Manufacturers are free to purchase/sell allowances according to market cost,” it said.

Yet now, with consumer demand for EVs running well behind anticipated levels, the picture looks very different. The UK’s car industry says it’s facing ZEVM fines of £1.8 billion this year alone, and is pinning the blame firmly on the government (a.k.a. taxpayers) for failing to incentivise EV purchases effectively, whether through direct grants or tax incentives.  

With a government review of the ZEVM scheduled to report early in 2025 to business secretary Jonathan Reynolds, there’s everything to play for. Expect concerted lobbying by the car industry, battling conflicting demands from environmental campaigners and EV infrastructure providers for the government to stick to its ZEVM guns. Consumers, it seems, are still not being included in the debate. 

Annual ZEV Mandate targets to 2035

Reaction: then and now

Lisa Brankin, Ford UK Chair: 

Then (Sept 2023): “Ford’s electric vehicle plans in Europe are unwavering and we will offer an exciting all-electric car line-up by 2030. Ford has backed plans for a UK zero-emission vehicle mandate because it provides a strong investment signal to infrastructure providers to accelerate installation of new charge points. Alongside the SMMT, Ford has provided input to the Department for Transport to help shape the mandate in the early years and it is very welcome to see some of those ideas reflected.

Now (BBC i/v Nov 2024): "The one thing that we really need is government-backed incentives to urgently boost the uptake of electric vehicles.” Without incentives, a government mandate to sell more EVs “just doesn’t work”, she says. 

Mike Hawes, SMMT Chief Executive: 

Then (Sept 2023): “Manufacturers finally have clarity on what they are required to sell next year and up to 2030. The industry is investing billions in decarbonisation and recognises the importance of this mechanism as the single most important measure to deliver net zero. Delivering the mandate will challenge the industry, despite the flexibilities now included to support pragmatic, equitable delivery given this diverse sector.

“It is worth noting the mandate means the UK still retains the most ambitious transition timeline of any major market but without any private consumer incentives. Furthermore, the lack of a post-2030 regulatory framework creates investment uncertainty.

Now (Nov 2024): “We need an urgent review of the automotive market and the regulation intended to drive it. Not because we want to water down any commitments, but because delivery matters more than notional targets. The industry is hurting; profitability and viability are in jeopardy and jobs are on the line. When the world changes, so must we. Workable regulation – backed with incentives – will set us up for success and green growth over the next decade.”

Charge UK (EV infrastructure firms trade body)

Then (Sept 2023): “Members of ChargeUK have committed over £6 billion to roll out EV infrastructure in all parts of the UK at an unprecedented rate, turning on a new public charging point every 20 minutes, creating good, sustainable jobs, supporting the switch to EVs and thereby reducing emissions and improving air quality for all.

This has been made possible by a clear commitment from the UK government to decarbonise our economy, with the 2030 phase out date for new petrol and diesel vehicles 2030 acting as an essential catalyst.”

Now (Nov 2024): Government could not have been clearer last week in its meeting with the automotive and charging industries that there would be no tinkering with the percentages of electric cars that must be sold ahead of 2030. Any backsliding on that risks inducing the uncertainty that all sides agreed is the very enemy of the EV transition.

“Billions of pounds of investment in the EV charging infrastructure roll out will be put at risk should the ZEV mandate be redrawn. This would be particularly foolish given the charging industry is busy deploying the infrastructure that is essential for the automotive sector to sell EVs and for the UK to meet its net zero goals.

ZEV mandates around the world

California kicked off the Zero Emissions Vehicle mandate trend in 1990 when the California Air Resources Board required car makers to sell an increasing number of ZEVs. Currently, EVs must make up 25 per cent of sales by 2025, but companies are able to trade credits with other car makers to meet targets. Stiff penalties are in place for those who don’t.

China’s mandate for zero and low-emissions vehicles requires 18 per cent of new vehicles to comply by 2023. An EU emissions target requires car makers to cut CO2 emissions by 37.5 per cent by 2030, but the commission is also banning the sale of new petrol and diesel cars by 2035, albeit with an exemption for efuels.

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