Government rejects car makers’ demand for urgent ‘reality check’ on ZEV Mandate
The UK’s automotive industry has called for an urgent review of the ZEV Mandate, claiming its current targets cannot be met.
The Society for Motor Manufacturers and Traders (SMMT) says that economic and political factors have changed so much in the past five years that the planned phase out of ICE vehicles by 2035 is under threat.
It argues that the targets for EV sales set out under the ZEV Mandate were based on assumptions which no longer hold true. It says that “global and geopolitical reality” means an urgent review of targets and timescales is required. The government is already planning a review in 2027, but the SMMT has called for this to be accelerated.
The Government, however, immediately rejected the demand, while critics of the SMMT position warned that backtracking on the policy now would be harmful to the UK’s efforts to decarbonise. And new government figures show that manufacturers hit their targets through sales and emissions trading mechanisms.
Shifting landscape
The UK has some of the toughest EV targets in the world, with 33% of all new car sales and 24% of new van sales required to be zero-emissions by the end of this year. In 2027, those numbers rise to 38% and 34%.
EV sales in 2025 rose by 24% year-on-year and accounted for 23.4% of all registrations by the end of the year. However, the start of 2026 has seen slower progress and EVs currently have a market share of 24.2%.
The SMMT said that discounts and deals offered by manufacturers had helped stimulate growth in 2025 but warned: “Such subsidies are unsustainable and undeliverable when at the end of 2027 the targets become significantly tougher. Natural market demand will not deliver the doubling in new car market share in two years, never mind the quadrupling of electric van market share, needed to achieve these targets.”
The body said that global events had “undermined” the assumptions on which the mandate was based. It highlighted battery costs which are 30% higher than predicted back in 2021, higher energy and charging prices at home and in public; higher manufacturing costs and a failure for EVs to reach price parity with ICE.
SMMT chief executive Mike Hawes said: The UK’s EV transition pathway was conceived with the best of intentions – but the assumptions behind it have proved over-ambitious.
“A landscape which once looked solid has turned out to be quicksand. Recognising the world of 2026 is not the one envisaged five years ago is not a retreat from ambition; it is a necessary step to achieving it.”
However, minutes after Hawes spoke at the SMMT Electrified conference, the Minister for Aviation, Maritime and Decarbonisation, Kier Mather, said: “It [the review] is beginning this year, but early 2027, we feel, is the right point to make sure that we can test properly where the pressure points lie in the ZEV mandate and make sure that it continues to work for manufacturers.
“The government is incredibly clear that the EV transition is something that we stand resolutely behind.”
Transition can’t be stopped
Despite the SMMT’s arguments, those within the EV sphere have warned that changing policy now will have an even more harmful effect on the country’s emissions targets.
Tanya Sinclair, CEO of lobby group, Electric Vehicles UK, said: “The UK’s EV transition is already well underway. Electric vehicles accounted for almost a quarter of new car sales last year, and more than two million drivers are already enjoying the benefits of going electric.
“If some manufacturers now want to weaken the targets designed to bring these vehicles to market, they are only hurting themselves.
“Asking government to slow the rollout of EVs goes against what drivers want and risks reducing choice just as demand is growing. Weakening the ZEV mandate will not stop the transition. It will only leave the companies calling for it further behind.”
ZEV target hit in 2024
While the SMMT claimed manufacturers are far behind the mandate targets, new government data suggests that the ZEV mandate is working.
Figures from the Vehicle Emissions Trading Schemes (VETS) for 2024 shows that thanks to other flexibilities around lower fleet emissions the industry hit its targets.
The data shows EVs reached a 19.8% market share against a target of 22%. However, through CO2 credit trading, falling emissions of ICE models and “forward borrowing”, manufacturers hit an equivalent of 24.1% market share.
Ben Nelmes, CEO of analyst New AutoMotive, commented: “There has been a consistent drumbeat of claims from automotive industry representatives that the ZEV mandate targets were unattainable. Today’s DfT report proves that those claims were false. Not only did manufacturers meet the targets, they over-complied.
“At New AutoMotive, our modelling estimated the ‘real’ required ZEV sales level was being easily achieved by carmakers. I am delighted that the Department for Transport’s report validates our methodology and shows that the mandate is working exactly as intended, driving down emissions while providing manufacturers with the flexibility they need to transition.”
