UK Government fast-tracks EV targets consultation

The UK Government has announced a fast-tracked consultation to review its Zero Emission Vehicle (ZEV) mandate, following mounting pressure from the automotive industry. The move comes as carmakers warn that current electric vehicle (EV) sales targets threaten jobs and manufacturing viability.

Business secretary Jonathan Reynolds confirmed that a consultation would be launched in the coming weeks at the SMMT’s (Society of Motor Manufacturers and Traders) annual dinner on November 27th.

While he stressed that the Government is still committed to the 2030 phase out date for petrol and diesel vehicles, he said there is a need for more support to make the transition to electric a success.

ZEV mandate

The ZEV mandate, introduced to drive the UK’s transition to electric vehicles, requires manufacturers to progressively increase the share of zero-emission vehicles in their sales mix, culminating in an 80% target by 2030. Companies face fines of £15,000 per missed vehicle under these quotas. However, with EVs accounting for only 18% of sales this year — below the required 22% threshold — the industry has flagged significant challenges.

Recent announcements from Stellantis, Ford, and Nissan underscore these concerns. Stellantis cited the ZEV mandate as a factor in its decision to close its van plant in Luton, putting 1,100 jobs at risk. Ford has announced 800 job cuts in the UK, while Nissan has warned of potential manufacturing job losses.

Key consultation topics

The consultation will address several industry demands, including expanding existing loopholes, such as credit trading between manufacturers and deferred compliance through future overachievement, and revising how hybrid technologies fit within the framework by considering the extension of sales of “full hybrids,” like the Toyota Prius, which use a combination of engine and battery power. The consultation also raises the possibility of extending plug-in hybrids and exploring allowances for less battery-dependent “mild hybrids.”

Government’s stance

Jonathan Reynolds, the Business Secretary, emphasized Labour’s commitment to the 2030 ICE phase-out but acknowledged the need for practical adjustments. “We’ve heard the concerns from the automotive industry loud and clear,” Reynolds said. He admitted that inherited policies on ZEV targets “are not operating as intended” and promised to explore a “better way forward.”

This approach follows a turbulent week, including Transport Secretary Louise Haigh’s resignation, which is not expected to disrupt the process.

Industry and advocacy reactions

The automotive sector welcomed the consultation but remains cautious.

SMMT CEO Mike Hawes highlighted the industry’s struggles, pointing to global profit warnings, production cuts, and job losses. “The pace of transition must not devastate jobs or manufacturing,” Hawes said.

Electric vehicle advocates, however, expressed concerns that concessions, particularly around hybrid sales, could slow EV adoption and deter investment. They argue that hybrids, while reducing emissions, do not offer the long-term benefits of fully electric models.

A relaxation of ZEV targets and hybrid allowances would provide relief to manufacturers like Toyota, Honda, Hyundai, Nissan, and Kia, all of whom have significant stakes in petrol-electric hybrid technology. It could also address the stagnation in electric van sales, which remain at just 5%, due to limitations in range and payload.