What is the UK ZEV mandate: Is it good for business?

As the world pivots toward a greener future, the UK government is driving change with bold targets to supercharge the EV market and tackle climate change.

At the heart of this transition lies the Zero Emission Vehicle (ZEV) mandate - an important policy in the government's strategy to shift away from fossil fuel-powered vehicles and embrace a future dominated by electric alternatives. 

The ZEV mandate aims to reshape the automotive landscape by ensuring 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 ZEV mandate UK officially came into effect on January 3, 2024, under the last conservative government. 

However, the current labour government, led by Keir Starmer, has made it clear that they’ll pick up the zero-emission goals with even more fervour, as well as committing to restore the original temporal goalposts of the ICE (Internal Combustion Engine) car ban from 2035 back to 2030.

In our article, we’ll explore:

• How the government is empowering the ZEV mandate into action
• What the potential penalties might look like for manufacturers that don’t comply
• What flexibility exists in the mandate (e.g. a longer transition timeline for vans) 
• And ask the question, is there a ZEV mandate update in 2025?

Is the ZEV mandate good for UK business?

The UK’s Zero Emission Vehicle (ZEV) mandate is a real game-changer for businesses within the automotive and energy industry. 

Its primary benefit is the alignment of government policy with industry needs, establishing both a precedent for change and a clear framework for measurable progress - a goal is always a good starting point for transformation!

Regarding the economy, the mandate sends a strong signal to potential investors that the UK is committed to advancing decarbonisation and fostering stability for innovation and job creation. For example:

The UK's electric vehicle market is projected to grow by 8.59% between 2025 and 2029, resulting in an estimated market volume of $51.3 billion by 2029.

But it’s also crucial for global reputation - showing that the UK can be a serious player and even a leader in decarbonisation efforts. 

It’s worth noting that the automotive industry is already adjusting, as indicated by the SMMT data below - underscoring the momentum behind these changes. 

Reasons why the mandate matters for business:

1. Global leadership: It positions UK companies as leaders in green practices, boosting appeal to eco-conscious customers and investors.
   
   
2. Driving economic growth: Encourages investment in EV technologies, battery production, and charging infrastructure. It also sparks job creation - “Energy Managers” were #8 in LinkedIn’s fastest-growing jobs in 2025. 
   
   
3. Future-proofing against market shifts: Early compliance avoids penalties and provides businesses with a global competitive edge in an electrifying market.

The ZEV mandate consultation 

Has there been any change from the ZEV mandate 2024 to 2025?

Like any important legal policy, the government wants to make sure it’s fit for purpose, especially one as transformative as the ZEV mandate.

That’s why on 24th December, the government launched an official consultation to gather public and industry feedback on the ZEV mandate. The consultation aims to refine the implementation of the policy and address key technical and logistical challenges.

The consultation focuses on:

1. Ending the sale of internal combustion engine vehicles by 2030.
2. Supporting the UK’s transition to zero-emission vehicles (ZEVs).

You can find more information on the consultation here. 

Stuart Tolley, GEO Director UK & IRE at Virta, says: 

“We hope that the ZEV mandate consultation will provide the opportunity to set in place concrete actions to support the sector in the transition to zero-emission vehicles.”

Industry reception to the consultation has been wholly positive, as they welcome the chance to help educate the government on what the industry needs, as well as gain greater knowledge of what support is possible from the government. 

6 common questions about the ZEV mandate

Below, we explore some of the most frequently asked questions from manufacturers, service providers, associations, and other industry stakeholders about the mandate. 

1. Why was the ZEV mandate killed by the previous government?

In this context, ‘killed’ might be a strong word to describe the Conservative party's approach to the ZEV mandate - especially when considering they spearheaded the mandate in January 2024. 

However, there’s no denying that they remained cautious of the economic impact on automakers, pressures on infrastructure, and in general, their focus remained on deregulation rather than a proactive industry intervention.

In fact, the initial mandate vote led to Rishi Sunak’s “largest rebellion” in parliament - with 28 Conservative MPs voting against it. 

In contrast, the new Labour government has embraced the ZEV mandate with enthusiasm, tying it to their broader vision of a Net Zero Britain. Government officials emphasise its potential to drive economic growth and secure skilled jobs in the automotive sector.

Government official Anthony Browne, Technology and Decarbonisation Minister, says:

"Alongside us having spent more than £2 billion in the transition to electric vehicles, our zero emission vehicle mandate will further boost the economy and support manufacturers to safeguard skilled British jobs in the automotive industry."

But they believe it’s not just about the economy; it’s also about reputation, as mentioned above. 

PM Keir Starmer believes the UK should be a trailblazer in delivering decarbonisation. Speaking at COP29 in December 2024, he stated:

“The UK has a huge opportunity to lead the way in green investment and climate action. We can show the world that economic growth and environmental responsibility go hand in hand."

2. Are there ZEV mandate targets? 

Yes, the ZEV mandate includes specific targets for the percentage of new vehicles sold that must be zero-emission. Current targets are:

• 50-70% of new car sales need to be zero-emission by 2030.
• 100% of new car and van sales to be zero-emission by 2035.

The targets aim to phase out internal combustion engine (ICE) vehicles in line with the UK's broader climate goals.

However, these targets could change after the official consultation to align with what’s achievable for the industry. 

3. What about ZEV mandate fines?

Under the ZEV mandate, manufacturers that fail to meet their targets may face significant financial penalties. The fines are structured to incentivise compliance while ensuring the system is fair. Specific details about fine levels often depend on:

• Shortfall in meeting ZEV targets: Fines may scale based on how far a manufacturer falls short.
• Credit availability: Manufacturers may purchase or trade credits to offset fines. The fine amounts are designed to make non-compliance more expensive than adopting zero-emission technologies.

When it comes to fines, it’s certainly a fine line between encouraging manufacturers to supply low-emission vehicles without making the transition seem impossible.

However, in general, the targets have received industry support. In a Times article, general feedback from major UK Energy Companies was: 

"Loosening rules on electric vehicle targets could increase household energy bills and fuel costs, impacting investments in new energy sources like wind and solar power."

4. Are there flexibilities in the mandate for manufacturers? 

Both government and industry recognise that although these goals are necessary, they’re also ambitious - which is a good thing! That’s why we anticipate some flexibility for manufacturers dependent on their unique circumstances. 

Current and proposed flexibilities include:

• Credits and trading: Automakers can earn credits for selling zero-emission vehicles and trade them with other manufacturers who may struggle to meet their targets.
  
  
• Extensions: Extending the flexibility period for certain requirements out to 2026. 
  
  
• Fleet-based emissions trading: Proposals to allow trading between van and car fleets, enabling manufacturers to balance their obligations across different vehicle types.
  
  
• Adjustable penalties: Fines or penalties for non-compliance may vary based on the extent of the shortfall.

Similarly, with the fines mentioned above, many aspects of the ZEV mandate will likely be revisited during the consultation, so expect some adjustments over the next couple of months. 

5. Are there other ZEV mandates around the world?

Yes! ZEV (Zero Emission Vehicle) mandates are driving the global adoption of clean vehicles, from the United States to China.

In the U.S., California has one of the most progressive state targets, and its goals are similar to those of the UK, with 100% zero-emission new car sales by 2035. Other states are adopting similar policies. However, with the Republican party now in power, this might change. 

The European Union also enforces strict CO2 targets, mandating all new cars be zero-emission by 2035. 

China’s NEV (New Energy Vehicle) mandate requires 25% of sales to be New Energy Vehicles by 2025, supported by subsidies and infrastructure investments.

Many in the United Kingdom believe the UK’s mandate is one of the most committed because of its early targets and regulatory support from the government. Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), says:

"Government's Zero Emission Vehicle (ZEV) Mandate proposals are the most ambitious of any major market in the world."

6. What other policies is the government considering?

The ZEV mandate is just one component of the UK's broader decarbonisation strategy. Other ways they are trying to support the transition include:

• EV Infrastructure Deployment: Large-scale investment in charging stations to support EV adoption, with a focus on rapid and ultra-rapid chargers.
  
  
• Incentives for consumers: Grants and tax breaks for EV buyers to make zero-emission vehicles more accessible.
  
  
• Fuel efficiency standards: Tightening regulations on fuel economy and emissions for ICE vehicles to encourage transition to cleaner options.
  
  
• Battery recycling and supply chains: Policies to ensure sustainable sourcing and recycling of critical materials like lithium and cobalt.
  
  
• Energy grid upgrades: Enhancements to the power grid to handle increased EV charging demand.

Overall, the UK’s ZEV mandate is an integral component of the nation’s plan to decarbonise its transport sector, reduce reliance on fossil fuels, and meet international climate targets. 

The mandate incentivises automakers to adopt cleaner technologies while also driving the expansion of EV infrastructure to support the growing market for zero-emission vehicles. We’re heading in the right direction, that’s for sure.