The UK’s car manufacturers are sounding the alarm, claiming the government’s Zero Emissions Vehicle (ZEV) Mandate is piling on “unsustainable business costs.” According to the Society of Motor Manufacturers and Traders (SMMT), the current ZEV Mandate could cost the industry an eye-watering £6 billion in 2024.
Here’s the breakdown:
- £4 billion would go toward slashing showroom prices to boost demand for electric cars, aiming to meet the mandate’s target of EVs making up 22% of total sales.
- £1.8 billion could be spent on fines for missing those targets.
The SMMT is urging the government to step in, warning that the mounting costs could have a devastating impact on business viability, jobs, and the UK’s transition to green vehicles.
But the pressure is on the government too—especially for Labour, which campaigned on supporting British industry while also promising stricter environmental policies. Their current challenge is balancing support for manufacturers while sticking to climate goals, like the upcoming 2030 ban on new petrol and diesel car sales, which the previous government delayed to 2035.
Industry leaders are warning that this crisis could go global. Weak demand for EVs has already led to production cuts. If costs spiral further, brands might exit the UK market altogether, making the country less attractive for international manufacturing investments.
SMMT Chief Executive Mike Hawes isn’t asking for weaker targets but wants regulations to reflect market realities. “The industry is hurting; profitability and viability are in jeopardy and jobs are on the line. When the world changes, so must we. Workable regulation – backed with incentives – will set us up for success and green growth over the next decade” he says.
When the ZEV Mandate was planned, the industry estimated 457,000 EV registrations for 2024. Current projections fall nearly 100,000 short, despite billions being poured into EV development and 130 zero-emission models now on sale.
There’s also a clash brewing between car makers and the EV charging industry. While manufacturers call for more flexibility, EV infrastructure investors argue the ZEV Mandate is essential to keep funding flowing for new charging networks. Back in October, trade group Charge UK pushed back, saying any easing of the mandate would undermine confidence in the UK’s commitment to EV adoption.
The government faces a tough decision: revise the ZEV Mandate to help car manufacturers stay afloat or stick to the original targets to maintain investor confidence in EV infrastructure. Either way, the stakes are high, with the future of UK manufacturing and its green transition hanging in the balance.
What would you do? Adjust the rules or stick to the plan?
