UK changes ZEV mandate to make it easier to manufacture EVs

The UK government, in a late April 6 statement, said it has changed its zero-emission vehicle mandate to make it easier for the auto industry to upgrade to electric vehicles while stopping sales of new internal combustion engine cars by 2030.

The government confirmed the 2030 phaseout date for new ICE car sales, enhancing the mandate's flexibility for manufacturers until 2030 to accommodate higher demand in later years. Hybrid vehicles, along with hybrid, plug-in hybrid, and ICE vans, will be permitted for sale until 2035 to ease the transition and provide the industry with more preparation time.

To further stimulate EV demand, the government plans to ensure new charge points every half hour, supplementing the GBP2.3 billion ($2.95 billion) already allocated for boosting British manufacturing and improving charging infrastructure.

The government said it was also pressing on with tax breaks to help people switch to EVs.

The updated mandate extends the current borrowing ability from 2024-26 to enable repayment through 2030, allows the transfer of non-ZEVs to ZEVs from 2024-26 until 2029, and introduces a new flexibility for van-to-car transfers. However, small and micro-volume automakers, such as McLaren and Aston Martin, are exempt from the mandate.

It said the decision to change the mandate was made after extensive consultation. The government had worked with the auto industry to strengthen its commitment to the phase-out and introduce practical reforms to support the industry's ambition.

Industrial Strategy

The package will be backed by a modern Industrial Strategy, to be published in spring 2025, which would aim to help British businesses realize the potential of industries of the future.

"Support for the car industry will be kept under review as the impact of new tariffs becomes clear," it said.

UK Prime Minister Keir Starmer said in the statement that global trade was being transformed, which meant the UK had to go further and faster in reshaping its economy through the Plan for Change.

"Now more than ever UK businesses and working people need a government that steps up, not stands aside. That means action, not words," he said.

"This will help ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence," Starmer said.

UK Transport Secretary Heidi Alexander said the automotive industry deserved clarity, ambition, and leadership in the face of global economic challenges.

"Our ambitious package of strengthening reforms will protect and create jobs -- making the UK a global automotive leader in the switch to EVs -- all the while meeting our core manifesto commitment to phase out petrol and diesel vehicles by 2030," she said.

According to data from the Society of Motor Manufacturers and Traders, the UK sold a record 69,313 battery EVs in March, rising 43% year over year.

"There is a huge opportunity to be harnessed here -- with the UK being the largest EV market in Europe," the government said.

The UK government noted that over GBP6 billion of private funding is earmarked for the UK's charge point rollout by 2030, with GBP34.8 billion in private investment announced for clean energy industries since July 2024.

SMMT welcomes change

SMMT CEO Mike Hawes issued a separate statement welcoming the mandate change, saying the government had listened to the industry, responded quickly to global dynamics, and recognized the intense pressure manufacturers were under.

"Industry remains committed to decarbonizing road transport but the ZEV Mandate targets are incredibly challenging, especially with a paucity of consumer demand and geopolitical upheaval. Growing EV demand to the levels needed still requires equally bold fiscal incentives, however, to give motorists full confidence to switch," he said.

"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, saying UK-US negotiations must continue at pace, while the long-awaited industrial and trade strategies should prioritize automotive and be delivered at speed.

"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 said.

Electric Vehicles UK CEO Dan Caesar said separately that while there were some cautious reasons to be optimistic about the UK's trajectory and ZEV mandate, its dilution was in stark contrast to the accelerating ambition of the Chinese and others.

"UK-based automakers need to fully embrace battery electric or be significantly diminished in time," he said.

EV advocacy group FairCharge Founder Quentin Willson welcomed the government's declaration of support for the auto industry and its recognition that Britain was now a major player in the global EV sector.

"While we don't agree that hybrids mainly powered by a combustion engine should be included in the ZEV mandate until 2035, we do understand the reasons why, along with increased flexibilities until 2029," he said.