View on UK market for EVs split as sector hits back at calls for weaker EV policy

The Society of Motor Manufacturers and Traders (SMMT) has consistently advocated for a softer mandate since the targets were published in 2024.

On 12 March, SMMT released a report urging a review of the Zero Emissions Vehicle (ZEV) Mandate. That same day, the UK Department for Transport (DfT) published final compliance data for 2024 on vehicle emissions trading schemes, revealing that both the UK car and van markets exceeded the ZEV mandate requirements.

This led to two contrasting narratives: SMMT argued that the targets, first consulted on in 2021, were overly ambitious, while DfT’s findings showed that automakers surpassed the targets to such an extent that a substantial number of allowances have been banked for future years.

SMMT’s call for a mandate review, which the government has agreed to, is not new. The organization, representing industry incumbents, has pushed for a softer mandate since the targets were set in 2024. Their main argument was that automakers would struggle to meet the ZEV Mandate and face unaffordable penalties. This view gained traction, with the Energy & Climate Intelligence Unit (ECIU) noting that over 40 UK national media articles since January 2024 claimed the industry had missed or would miss its targets.

However, both ECIU and independent transport research group New Automotive highlighted the inaccuracy of these claims. In 2024, the headline target was for 22% of sales to be battery or hybrid EVs. While 19.8% of sales met this, flexibilities in the mandate allowed carmakers to earn credits from lower-emission petrol and diesel vehicles, adding another 4.7%.

New Automotive’s ZEV Mandate tracker, which incorporates these flexibilities, confirmed the accuracy of its data with the DfT’s report. CEO Ben Nelmes stated the report disproves “a consistent drumbeat of claims from automotive industry representatives” that the targets were unattainable.

According to SMMT chief executive Mike Hawes, headline figures about the UK’s EV market growth and target achievement “don’t tell the full story.” In its report, Same Destination, Smarter Route, SMMT claims that changes in UK market conditions have widened the gap between policy ambition and market reality.

Hawes stated, “The UK’s transition pathway was built on assumptions that have proved to be over-optimistic.” The report notes that battery costs are over 30% higher than expected, raw material costs remain high, and UK and EU industrial energy prices have risen 80% and 28% respectively since 2021. As a result, the anticipated price parity between electric and internal combustion engine vehicles has not materialised.

Additionally, while charging infrastructure has expanded, public charging costs have, in some cases, increased by more than 140% over the past five years. Combined with the upcoming road tax for EVs, these factors make the future challenging for automakers, according to SMMT. The report states that the ZEV Mandate has so far been met through flexibilities and “unprecedented levels of discounting – more than £10 billion over the past two years.”

SMMT argues that a review of the mandate is necessary, citing other regions such as Canada and Europe that have relaxed their targets, and the US, which has rescinded all EV commitments. While SMMT says the industry does not want to abandon the mandate, it insists it needs to be softened.

However, calls for a weaker mandate have been criticized as unnecessary and unwise. SMMT claims there is insufficient market demand to meet EV targets, but many in the EV sector argue that the solution is to stimulate demand, not weaken targets.

Fiona Howarth, CEO of Octopus Electric Vehicles, described weakening the ZEV Mandate as “the wrong approach.” She emphasized the need to focus on building confidence and accelerating the transition to UK-produced energy, rather than slowing progress.

Vicky Read, chief executive of ChargeUK, agreed, noting that while it is positive to see the auto and charging industries united in addressing public EV charging affordability, calls for a weaker mandate are “unnecessary and unwise.” She pointed out that the mandate was reviewed and amended only last year, and further changes could deter investment in charging infrastructure and hinder EV adoption.

SMMT’s report also addresses geopolitical tensions, claiming that the European Union’s draft Industrial Accelerator Act, which promotes ‘Made in Europe’ components, threatens trade in the very vehicles the EU and UK aim to support.

Colin Walker, head of transport at ECIU, highlighted that the benefits of driving an EV have been underscored by rising oil prices due to Middle East conflicts. He noted that as oil prices exceed US$100 a barrel and the second-hand EV market grows, families are saving on driving costs and protecting themselves from global volatility.

Walker added that despite misinformation about EVs and doubts about meeting government targets, the policy has fostered competition, driven down prices, and enabled more families to switch to EVs and reduce their driving expenses.