► The UK government will consult with manufacturers on the ZEV mandate
► Government will not budge on the 2030 ICE ban however
► How each manufacturer has been responding to 2024’s 22% target
The government has announced a fast-track consultation on potential changes to the ZEV mandate after the Business Secretary, Jonathan Reynolds, admitted the current plan was ‘not working as intended’.
Reynolds announced that the government would now consult with car makers on the mandate, adding ‘we know that you need certainty’ when talking at the annual the Society of Motoring Manufacturers and Traders (SMMT) dinner. There are no confirmed changes yet, but Reynolds did confirm the 2030 ICE ban would not be adjusted.
With 2025 now just a few weeks away, it’s increasingly clear that the Zero Emission Vehicles (ZEV) mandate – introduced as legally-binding zero emission vehicle sales targets – won’t be achievable for a vast majority of car manufacturers.
The mandate was introduced for 2024 and set out a clear path to the 2030 new ICE car ban. The ZEV mandate increases incrementally each year, with a 22% target for 2024.
Figures from SMMT for October show the overall market share for EVs for 2024 is 18.5%. Fines of £15,000 will apply to each car sold beyond this target. The ramifications of the ZEV mandate are already being felt. The ZEV mandate was cited by Stellantis as a reason for announcing it is to close the Luton van plant, and by Ford for cutting 800 jobs in the UK.
Nissan is the latest in a long line of manufacturers calling for urgent support from the government. Guillaume Cartier, chairperson for the Nissan Africa, Middle East, India, Europe and Oceania (AMIEO) region, said ‘the Mandate risks undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment’.
How the industry has responded to the ZEV Mandate
An open letter to the government asking for support
In October, the SMMT published a letter to Rachel Reeves, calling on increased government incentives to hep with the uptake of EVs. The letter, co-signed by senior executives from 13 manufacturers, spelled out requests to help reduce EV costs.
Chief among these suggestions included halving VAT on ZEVs for the next three years, exempting ZEVs from the Expensive Car Supplement (currently set to £40,000), and equalising VAT on public charging to the same 5% rate as home charging. The budget later that month saw none of these incentives implemented.
A return to ICE
With an industry-wide slowdown in the adoption of electric vehicles, more and more brands are rolling back on plans to go all-in on electrification. Lotus announced it is to focus on PHEVs alongside pure EVs as luxury EV demand faltered. Mazda, Toyota and Subaru announced plans to co-develop new engines capable of running on fossil-fuel alternatives for use in hybrids.
Unsustainable discounts on EVs
While EVs are continuously recording record registrations, the SMMT has cited ‘unsustainable discounts’ as the major driving factor. Mike Hawkes, CEO of the SMMT, estimated that 2 billion pounds was being spent on discounts for EVs for 2024.
What this means for consumers is leasing and finance rates for electric cars are incredibly good now. EVs including the Volkswagen ID. Buzz and Vauxhall Astra are currently exceptional value for money.
How each manufacturer has responded to the ZEV mandate
BMW (BMW, MINI) – On track to reach the mandate target. David George, CEO of BMW Group UK signed the SMMT letter.
Daimler (Mercedes-Benz) – On target to meet the mandate target. Olivier Reppert, CEO and MD of Mercedes-Benz UK signed the SMMT letter.
Ford – Not on target to reach the target for 2024. Recently announced 800 job loses with weak EV demand cited as a partial reason. Lisa Brakin, Ford of Britain Chief has called for a government-led increase in incentives for EVs and signed the SMMT letter.
Geely (LEVC, Polestar, Smart, Volvo) – Predicted to hit 36% EV sales share in 2024, easily surpassing the target. Managing directors from LEVC, Polestar and Volvo signed the SMMT letter.
Honda – Not on target to hit the mandate target. Late to the party with EVs, it’s now working on an ambitious EV plan for 2040. Rebecca Adamson, Head of UK Automobile, Honda Motor Europe, signed the SMMT letter.
Hyundai – Within touching distance of the target, helped by the well-received Ioniq range. Planning to double hybrid range as EV demand dwindles.
JLR (Jaguar, Land Rover) – Committed to a 100% electric lineup by 2025. Currently offer no ZEVs. Patrick McGillycuddy, MD signed the SMMT letter.
Kia – Not on target to hit the target, even with the expansion of the EV range. Paul Philpott, President and CEO of Kia UK, signed the SMMT letter
Mazda – With only one EV on sale it will not meet the target. Mazda is planning on introducing more EVs, but has doubled down on combustion, recently launching new diesels and even the rotary engine.
Renault Nissan – Again not on course to hit the target, Renault’s ambitious EV strategy really kicks off in 2025 with the electric 5 and 4 entering production. Diana Torres, Vice President & MD Mercedes-Benz UK Nissan Motor Great Britain signed the SMMT letter. Nissan has also called for more support.
SAIC (Maxus, MG) – Predicted to meet the target. Exceptionally affordable EV range has helped matters a lot.
Stellantis (Alfa Romeo, Fiat, Peugeot, Vauxhall) – Projected to miss the target. Cited the mandate as a reason for closing the Luton van plant (although this needs to be caveated with Brexit damaging the plant’s viability). Vauxhall is limiting availability of ICE models to fleets to try and reach targets and offering substantial discounts.
Subaru – Close to meeting the target. A limited line up and small sales figures helps matters.
Suzuki – Only recently announced its first EV which means it offers no zero emission vehicles currently. Removed Swift Sport, Ignis, Swace and Jimny LCV from sale for ZEV. Future EVs put on hold as brand monitors the slowdown of EV uptake.
Tesla – The EV only brand will hit the target. It has the option to sell credits to other manufacturers who miss the mandate.
Toyota – Only offers one electric car at current, so it’s far from the target. Scott Thompson, Vice President and MD of Toyota UK signed the SMMT letter.
VAG (Audi, Cupra, Seat, Skoda, Volkswagen) – As a wider group it’s not expected to hit the target, Cupra will though. Volkswagen has hinted it will close its Brussels EV plant as sales falter. Alex Smith, Managing Director of Volkswagen Group UK, signed the SMMT letter.
Specialist marques like Aston Martin, Ferrari and Rolls Royce are exempt from this mandate, so long as they’re registering less than 2,500 cars per year. This number will likely reduce as time goes on.
What counts as an ZEV?
The criteria is simple – a ZEV produces 0g/km of CO2 and has at least 120 miles of range, according to the WLTP test cycle. You’ll notice that we’re focusing in on EVs as they make up most of the market here, but hydrogen fuel cell vehicles like the Hyundai Nexo also count.