The government is currently re-evaluating its electric vehicle (EV) sales quotas, a pivotal component of its environmental policy agenda. This review follows a significant downturn in domestic car manufacturing, with 2025 recording the lowest vehicle production figures in the UK since 1952. Ministers are now examining potential adjustments to the zero-emission vehicle (ZEV) mandate, as confirmed by government sources.
Should the administration opt to reduce these quotas, it would mark a notable reversal on one of its cornerstone green initiatives, a policy particularly championed by Net Zero Secretary Ed Miliband. The ZEV mandate, introduced by the Labour government after coming into power in 2024, compels car manufacturers to achieve specific annual percentages of zero-emission car and van sales. This initiative is designed to pave the way for a complete prohibition on the sale of new petrol and diesel cars by 2030.
Photo: news.sky.com
The mandate stipulates an incremental increase in the required percentage each year, ultimately aiming for a 100% zero-emission target by 2035. Non-compliance with these targets carries substantial financial penalties. For instance, the target for 2024 was 22%, rising to 28% in 2025, and set to reach 33% in 2026.
Industry Challenges and Government Response
A government spokesperson acknowledged the difficulties faced by manufacturers, telling Sky News, “We recognise manufacturers are facing challenges, but we’ve shown we are adaptable before, and are beginning conversations to inform the planned review of the ZEV mandate, to be published by early 2027.” They further asserted that “It has never been easier or cheaper to own an EV, especially against the backdrop of high and fluctuating prices at the pumps,” adding that current electric car grants are boosting sales and the industry is on track to meet its 2025 objectives.
Despite these assurances, the broader automotive landscape shows signs of strain. While one in four new cars sold last year were zero-emission – a 25% increase from the previous year – overall car production experienced a 17% decline in February compared to the same period in 2025. Production figures for battery-electric, plug-in hybrid, and hybrid vehicles also saw a 3% dip, totaling 26,629 units.
Political Scrutiny and Policy Adjustments
The opposition Conservatives have sharply criticised the government for initiating “yet another review,” urging ministers to “face reality and ditch their misguided net zero zealotry that has left hard-working families footing the bill.” Richard Holden, the Conservative shadow transport secretary, advocated for the adoption of the Conservative plan, which he described as being “led by innovation and consumer choice rather than an ideological direction set by Ed Miliband.” Labour’s long-term ambition is to boost UK vehicle manufacturing to 1.3 million units annually by 2035, nearly doubling last year’s output of cars and vans.
The ZEV mandate itself has been implicated in the recent production downturn. Manufacturers reportedly face a penalty of £12,000 for each vehicle they fail to sell in order to meet their quota. This pressure has led to significant discounts on EVs, costing carmakers an estimated £10 billion over the mandate’s initial two years, according to the Society of Motor Manufacturers and Traders (SMMT).
Moreover, the government has already implemented some adjustments to EV policy. Last April, certain buyer incentives were removed, including the vehicle excise duty exemption for EVs, with a new “pay-per-mile” road tax for electric vehicles slated for 2028. Additionally, the ZEV mandate saw minor alterations following Donald Trump’s imposition of 25% import tariffs on cars and parts entering the US. These changes now permit the sale of hybrids until 2035 and exempt small manufacturers from the 2030 phase-out of new petrol and diesel car sales, while also offering carmakers more flexibility in how they achieve their ZEV targets.
