The Labour government is planning to relax its targets for electric car sales, acknowledging that current regulations may be increasing costs for consumers and are unlikely to be met. Ministers announced a review of the Zero Emission Vehicle (ZEV) mandate, stating that it is not 'fit for purpose' due to slower-than-expected adoption rates.
Under the existing law, by 2030, only 20 percent of new cars sold would be permitted to use petrol or diesel engines. The ZEV mandate requires a year-on-year increase in this target, reaching 33 percent for the current year and 38 percent for the next. However, only one in four new cars sold are currently electric vehicles (EVs). Factors contributing to this include a shortage of public charging stations, higher purchase prices, and range anxiety among drivers. A significant portion of current EV sales are also attributed to businesses rather than private consumers.
Automakers face substantial fines, up to £15,000 per vehicle, for exceeding their quota of fossil fuel car sales, with these costs potentially being passed on to consumers. The Shadow Transport Secretary, Richard Holden, criticized Labour's approach, stating that their 'Net Zero obsession is piling costs on hardworking families and taxpayers' and urged Prime Minister Andy Burnham to take immediate action to alleviate pressure.
Transport Secretary Heidi Alexander stated that it is appropriate to keep targets under review to ensure they are practical and support British industry. "The end goal hasn't changed – but we need to take business with us on the journey, and that’s exactly what we’re doing today, by making sure industry has the chance to shape how we get there," Alexander said.
Business Secretary Jonathan Reynolds emphasized that the review is about 'listening to industry,' which has for months indicated that the current targets were unrealistic. Consultation documents noted that slower ZEV demand, coupled with high UK energy and labor costs, tariffs, and trade barriers, necessitates careful consideration of the ZEV mandate's continued suitability. The review will explore potentially lowering the 2030 mandate from 80 percent to 70, 60, or even 50 percent, and may introduce more flexibility for manufacturers who struggle to meet the thresholds. A separate ban on sales of new pure combustion engine cars remains in place for 2030, with hybrids permitted until 2035. However, the move to revise the ZEV mandate has fueled speculation that other targets might also be subject to delays.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), welcomed the government's consultation, noting that the original regulation was developed under different economic conditions, including cheaper energy and lower production costs. This year, pure EVs have accounted for 25.3 percent of new car registrations, falling short of the required 33 percent target. Petrol cars remain the most popular, making up 42.8 percent of registrations.