UK government relaxes ZEV mandate
Furthermore, hybrid vehicles can be sold until 2035, the government announced. That applies to plug-in hybrids (PHEV), which can cover significant distances purely on electric power, as well as to full hybrids (HEV) with extremely short electric ranges. HEVs are mainly driven with the combustion engine; the electric drive usually only provides support – the purely electric driving range is rather limited. In addition, the significantly smaller battery of the HEV – in contrast to the PHEV – cannot be charged externally.
The adjustment of the so-called ZEV mandate with fixed and annually increasing electric quotas (by 2025, 28 per cent of UK sales must be electric) does not come as a surprise. Since demand remained below expectations, some manufacturers were only able to meet the 2024 targets by offering high discounts, causing them to lose profit. As a result, they increasingly opposed the regulation, citing the risk of job losses. Stellantis, for example, had threatened to close its van plant in Luton rather than invest in the planned e-van production there – and it did indeed shut down the factory at the end of March.
In January, the British government thus began a consultation phase in which the phase-out of combustion engines in 2030 and the ZEV mandate were discussed with the industry. Even if the hybrids somewhat soften the blow of the combustion engine phase-out, the regulation for pure combustion engines is intended to create planning security for consumers and industry.
However, the exact details are not yet known. There is talk of ‘increasing flexibility of the mandate for manufacturers up to 2030’ – but it is not yet known to what extent manufacturers will be allowed to deviate from the prescribed targets. The government also stated in its press release that ‘the package will be backed by a modern Industrial Strategy, to be published in full this spring, which will help British businesses realise the potential of industries of the future.’ There are no further details on this industrial strategy either.
However, the government is planning tax breaks for electric cars. These will be ‘worth hundreds of millions of pounds’ to help people finance the switch to electric vehicles.
It is also clear that the tariff dispute with the US played a role in supporting the domestic industry with the relaxed regulations. In 2024, 27 per cent of British car production was exported to the United States. What the future holds for this, as well as for all other countries, with the tariffs imposed by US President Donald Trump remains to be seen.
“Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change,” said Prime Minister Keir Starmer. “I am determined to back British brilliance. Now more than ever UK businesses and working people need a government that steps up, not stands aside.”
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