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The UK government has announced significant changes to its Zero Emission Vehicle (ZEV) mandate, aiming to push the automotive industry towards a more sustainable future while balancing regulatory demands with industry stability.

From 2025, at least 28% of new cars sold by each manufacturer must be zero emission, primarily pure electric vehicles (BEVs). However, recent changes have made it easier for manufacturers who do not meet these targets to avoid financial penalties or fines.

To support EV adoption, the government has introduced or expanded financial incentives. This includes a £1,500 discount on select electric car models, part of a broader £650 million Electric Car Grant scheme and £4.5 billion investment to grow EV infrastructure and reduce costs.

Despite these incentives, some experts warn that allowing manufacturers to more easily avoid fines could undermine EV sales growth, potentially slowing the overall transition to electric vehicles.

By 2030, these policy changes are expected to push manufacturers to progressively increase zero emission vehicle sales, balance regulatory demands with industry stability by reducing punitive costs for non-compliance, stimulate demand through grants and expanded EV options, help secure automotive jobs, and potentially slow the market transition relative to more stringent regulatory environments.

The electrified market (BEVs, PHEVs, and HEVs) grew by 36.3% in March, with 159,289 new units leaving forecourts across the country. Petrol cars, including mild-hybrids, continued to lead the market, but BEVs led the market in terms of registration improvement, with a 43.2% year-on-year increase.

The government has also announced measures to boost the new-car market, including a relaxation in the rules around the 2030 petrol and diesel new-car ban and a revised ZEV mandate. The Expensive Car Supplement (ECS), applicable to vehicles registered from 1 April, will see £425 added to the standard vehicle excise duty (VED) rate in years two to six of registration, with EVs no longer being exempt.

However, new BEVs registered on or after 1 April will be eligible for the ECS if they cost more than £40,000. The emissions flexibility cap has doubled to 90% in 2025, allowing 25.2% of a carmaker's fleet target to be made up of non-ZEV cars based on emissions trading credits.

The period where credit borrowing from other manufacturers is extended to 2029, with the borrowing threshold dropping each year. One car credit can now be exchanged for 0.4 van credits, while one van credit can be exchanged for two car credits in the new ZEV mandate plans.

Calls have been made for a reduction in VAT on public charging to benefit those without access to off-street parking. The UK's new-car market saw a growth of 12.4% in March 2025, with a total of 357,103 units registered, marking the best March total since 2019.

The SMMT (Society of Motor Manufacturers and Traders) chief executive, Mike Hawes, commented that the changes made by the government are a step in the right direction for the UK automotive sector, but more incentives are needed to encourage consumer demand for electric vehicles.

References:

1. Gov.uk: UK Zero Emission Vehicle Mandate
2. SMMT: March 2025 UK New Car Registration Figures
3. BBC: UK government relaxes electric car sales targets
4. Autocar: UK government confirms 2030 ban for new petrol and diesel cars
5. Gov.uk: £650m boost for electric cars
6. The UK government's Zero Emission Vehicle (ZEV) mandate aims to influence the manufacturing industry, primarily the automotive industry, toward a greener future while ensuring regulatory stability.
7. From 2025, at least 28% of new cars sold by each manufacturer must be zero emission, primarily pure electric vehicles (BEVs).
8. Financial incentives have been introduced to support EV adoption, such as a £1,500 discount on select electric car models and investments in EV infrastructure.
9. Experts suggest that lenient penalties for non-compliance could hinder the growth of EV sales and slow the transition to electric vehicles.
10. By 2030, these policy changes aim to increase zero emission vehicle sales, balance regulatory demands with industry stability, stimulate demand, secure automotive jobs, and potentially slow the market transition in comparison to stricter regulatory environments.
11. The electrified market (BEVs, PHEVs, and HEVs) reported a 36.3% growth in March, with BEVs leading in registration improvement.
12. The government has also announced measures to boost the new-car market, including relaxed rules for the 2030 petrol and diesel new-car ban and a revised ZEV mandate.
13. The Expensive Car Supplement (ECS), applicable to vehicles registered from 1 April, adds £425 to the standard vehicle excise duty (VED) rate in years two to six of registration, but EVs remain exempt if they are not luxury models.
14. New BEVs registered on or after 1 April will be eligible for the ECS if they cost more than £40,000.
15. The emissions flexibility cap has been increased to 90% in 2025, allowing 25.2% of a carmaker's fleet target to be made up of non-ZEV cars based on emissions trading credits.
16. The period for credit borrowing from other manufacturers has been extended to 2029, with the borrowing threshold dropping each year.
17. One car credit can now be exchanged for 0.4 van credits, while one van credit can be exchanged for two car credits in the new ZEV mandate plans.
18. Calls have been made for a reduction in VAT on public charging to benefit those without access to off-street parking.
19. The UK's new-car market saw a growth of 12.4% in March 2025, with a total of 357,103 units registered, marking the best March total since 2019.
20. The Society of Motor Manufacturers and Traders (SMMT) has expressed that the government's changes are a positive step for the UK automotive sector, but additional incentives are needed to stimulate consumer demand for electric vehicles.
21. Sustainable practices in the manufacturing industry, including the automotive industry, are not limited to zero emission vehicles; they also extend to finance, energy, aerospace, retail, transportation, cybersecurity, lifestyle, technology, data and cloud computing, and artificial intelligence, among others, as part of the drive for overall industry and personal growth.

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