At the beginning of the year, car and van makers were mandated to hit annual targets for zero emission vehicle sales in the run up to 2035. In this article we explain how it works and what effect it might be having on your business.
What is the ZEV Mandate?
2024 sees the Zero Emission Vehicle (ZEV) Mandate come into force. It’s been put in place by the UK Government to force manufacturers to sell an increasing proportion of electric vehicles (EVs) as part of their overall sales in England, Wales and Scotland. The share of EVs is targeted to increase annually up to 2035.
What are the targets?
The Government has stated that 80% of new cars and 70% of new vans sold in Great Britain will now be zero emission by 2030, increasing to 100% by 2035. The targets for cars are:
2024 22%
2025 28%
2026 33%
2027 38%
2028 52%
2029 66%
2030 80%
2031 84%*
2032 88%*
2033 92%*
2034 96%*
2035 100%*
* Target will be set out in future legislation later in the decade.
For vans, it’s:
2024 10%
2025 16%
2026 24%
2027 34%
2028 46%
2029 58%
2030 70%
2031 76%*
2032 82%*
2033 88%*
2034 94%*
2035 100%*
* Target will be set out in future legislation later in the decade.
What happens if the targets are not hit?
Vehicle makers that fail to hit these numbers each year could be subject to fines of up to £15,000 per car below the target and £9,000 per van this year (before increasing to £18,000 in following years).
However, the Government has said that manufacturers can ‘trade’ allowances with each other to try and avoid fines.
So a manufacturer that has sold more than the annual target could bank the extra units itself for another year when it may not, or sell them on the open market to one who has not reached the required level, to help reduce their fine.
In the first year, for example, carmakers can borrow up to 75% of their target from another OEM, although it reduces significantly after that, to 25% in 2026.
How will it affect my fleet?
At the moment, the industry is waiting to see how this might play out in terms of vehicle availability as well as the deals, support and prices for those sourcing EVs.
Gerry Keaney, British Vehicle Rental and Leasing Association Chief Executive, said the picture for cars was a ‘positive one’, but he was working with other trade associations and commercial bodies to address key concerns and show van operators how to make the switch effectively.
He added: “With the introduction of the ZEV Mandate officially mapping the UK’s journey to road transport decarbonisation, 2024 marks another critical year for the transition. Opportunities to support the switch are out there. It is now up to us to collectively grab them with both hands.”
In Cox Automotive's Insight report, the company’s Customer Insight and Strategy Director Philip Nothard said: "With EVs set to make up a growing proportion of the overall new car park, thanks to the ZEV Mandate, a rapidly changing OEM product mix and other factors, buyers need to be found for these new EVs.
“Without a sudden and dramatic turnaround in consumer appetite, fleets will continue to shoulder that burden.
Car and van manufacturers have differing views on how the legislation might affect them as they get closer to the target deadline. Volkswagen UK said the ZEV Mandate will “enable us to validate our sales plans for the coming years. The announcements have not changed our plans or the quantity of electric vehicles we are committed to sell”, while Ford recently warned that in order to hit targets it may have to restrict sales volumes of petrol and diesel models, and so change their mix of vehicles to bump up the electric share.
With the ZEV mandate in place, we’ll continue to provide insights into how this affects the industry and for other news, take a look here.
Download article
Related articles
or call
or call