Carmakers win! The 15,000-pound-per-vehicle penalty threat is lifted! UK eases mandatory EV sales rules

The British government has officially launched the process to relax the Zero Emission Vehicle (ZEV) sales mandate, with a public consultation now open until October 23.

This marks a victory for automakers that have been lobbying for policy changes, as they had been pressuring new Prime Minister Andy Burnham to review the policy ahead of schedule.

The ZEV mandate has been described as a tight constraint on British automakers. Effective from 2024, it requires automakers to increase the share of zero-emission new car sales year by year: 22% in 2024, 28% in 2025, 33% this year, rising steadily to 80% by 2030 and 100% by 2035.

Automakers that miss the targets face fines of up to £15,000 for each additional petrol or diesel vehicle sold, which was reduced to £12,000 after the first relaxation last April. They can also purchase credits from competitors that exceed their targets.

However, the current state of electric vehicle penetration in the British auto industry falls short of these targets. Although UK pure electric new car sales surged 34.2% in May this year, registrations accounted for only 27.3% of the total—significantly below the 33% compliance threshold required for automakers in 2026.

To boost sales, automakers have been forced to offer steep discounts. Volkswagen has warned it may raise petrol car prices to offset EV losses, while Stellantis has threatened to scale back its UK operations.

Sharon Graham, General Secretary of the UK's Unite union, had already described the ZEV policy adjustment as a "major victory" for auto workers when the government signaled a review in June, noting that further delay in loosening the policy would severely impact domestic manufacturing jobs.

According to earlier reports from British media, the adjustment direction includes lowering the 2030 EV sales share target from 80% to 50%, with the gap to be filled by hybrid models. However, the two key deadlines remain unchanged: the ban on new pure petrol and diesel car sales in 2030, and the ban on new hybrid car sales in 2035.