Government unveils changes to ZEV Mandate to back British carmakers

Prime Minister Keir Starmer has announced a sweeping overhaul of the UK’s Zero Emission Vehicle (ZEV) Mandate in a bid to support British carmakers and accelerate the transition to electric vehicles (EVs).

The reforms, revealed as part of the government’s wider Plan for Change, aim to give manufacturers like Rolls-Royce, Vauxhall, and Land Rover the flexibility and stability needed to navigate global economic uncertainty while delivering on the UK’s commitment to end the sale of new petrol and diesel cars by 2030.

The Prime Minister said the government must “go further and faster in reshaping our economy,” describing the changes as part of a new era of industrial strategy that puts British jobs and innovation at the forefront.

“I am determined to back British brilliance,” Starmer said. “This will help ensure home-grown firms can export British cars built by British workers around the world.”

Among the most significant updates to the mandate are extended flexibilities for manufacturers to meet EV sales targets. Carmakers will now be able to sell more petrol and diesel vehicles in the short term, with the option to catch up in later years as consumer demand for EVs continues to rise.

Hybrid vehicles will remain on sale until 2035—five years beyond the phase-out date for conventional petrol and diesel cars—allowing more time for manufacturers and consumers to adapt.

The government also plans to maintain generous tax incentives to encourage EV uptake and continue investing in charging infrastructure, with a new chargepoint reportedly being installed every 30 minutes. Meanwhile, the borrowing and trading of ZEV credits between years will be extended, and a new system will allow car and van credits to be exchanged across categories, further boosting flexibility for manufacturers.

Smaller and niche manufacturers, including iconic British brands like McLaren and Aston Martin, will be exempt from the ZEV targets altogether, in recognition of their limited production volumes and specialist focus.

Transport Secretary Heidi Alexander said the reforms will help protect and create jobs while making the UK a global leader in electric mobility. “Our automotive industry deserves clarity, ambition and leadership,” she said. “That is exactly what we are delivering today.”

Industry leaders have cautiously welcomed the changes. Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), praised the government for listening to industry concerns but warned that more bold action—particularly fiscal incentives—will be needed to boost consumer demand.

Hawes noted: “The government has rightly listened to industry, responded quickly to global dynamics and recognised the intense pressure manufacturers are under. Industry remains committed to decarbonising 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.”

Ian Plummer, Commercial Director at Auto Trader, added: “The government have gone some way to supporting the industry with the ambitious ZEV mandate targets by relaxing flexibilities and allowing hybrid sales to contribute to targets.

“However, the measures are still not enough. There are more new and used EVs than ever on sale now increasing the choice and affordability of the cars, but at this key moment for the global economy ministers should underpin consumer demand with tax breaks, such as cutting VAT on public charging.”