How the ZEV Mandate is Shaping the Future of UK Car Sales

What Is the ZEV Mandate and Why Does It Matter?

The Zero Emission Vehicle (ZEV) mandate started in January 2024. It asks car manufacturers to sell more zero emission vehicles (ZEVs). This includes electric cars and new vans. The UK government worked with the automotive sector and environmentalists to create this plan. They believe the ZEV mandate is the most ambitious regulatory framework for zero emission cars in the world.

The targets will increase gradually until 2035. By that year, all new car sales in the UK must be zero emission vehicles.

Annual ZEV Sales Targets for Cars and Vans

The rule is in line with the UK government’s plan to stop the sale of new petrol and diesel cars. Some car makers support these big goals. However, others are asking for reasonable laws and more investment to hit the yearly targets.

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Impact of the ZEV Mandate on the Automotive Industry

1. Challenges for Car Makers

Car makers feel more pressure to meet ZEV targets. They need to balance costs, what customers want, and how to make a profit. Mike Hawes, the SMMT Chief Executive, highlights these challenges.

The automotive sector expects that it could face fines of as much as £1.8 billion in the first year because of low EV sales. To help with this, manufacturers are looking for support from the UK government. This support could come in the form of tax breaks and grants for consumers.

2. EV Infrastructure Development

A major problem for people wanting electric cars is the lack of new charging points. Even though investments in EV infrastructure are speeding up, many are worried about how fast this is happening. This is especially true in Northern Ireland and in rural areas.

• ChargeUK is a trade body.
• They say billions of pounds in private investment could be at risk.
• This could happen if the ZEV mandate changes.

3. Effect on Consumers and New Car Sales

The ZEV mandate aims for a cleaner future. However, it shows a gap in what people want when it comes to electric vehicles. Some reasons for this gap include high initial costs, not enough charging stations, and growing living costs. These things impact EV sales.

Lisa Brankin, Chair of Ford UK, highlights:

Future Years: What Lies Ahead for the Car Industry

The next few years are crucial for the UK’s car industry. Car manufacturers want to hit their yearly goals. They also have to:

• Create affordable new vehicles, such as small and large vans.
• Put money into green growth technologies to match global markets like California and the European Union.
• Work together with the government to make sure there is workable regulation.

Global Comparisons: ZEV Mandates Around the World

Great Britain is a global leader. It is working harder than many other places to get rid of internal combustion engines.

The Role of Government Support

The UK government’s support is very important for the ZEV mandate to succeed. Business Secretary Jonathan Reynolds will share a review of the policy in early 2025. Here are some key measures that will be included:

• Increase EV infrastructure by adding more public chargepoints.
• Provide tax incentives for electric vehicles.
• Support workable regulation that balances industry growth with consumer demand.

The result of this review could shape the future of EV sales. It may also impact the automotive sector for the next decade.

Government Grants and Support for EV Buyers

The UK government has created several grants and incentives. They want to make electric vehicles (EVs) more affordable for buyers. These steps will also help manufacturers reach their Zero Emission Vehicle (ZEV) targets.

1. Plug-in Car Grant (PiCG)

The Plug-in Car Grant stopped for private cars in June 2022. However, it is still available for other electric vehicles, including:

• Small vans: You can get up to £2,500 for eligible small vans. These vans must have CO₂ emissions under 50g/km and an electric range of at least 60 miles.
• Large vans: There is a possibility to receive up to £5,000 for large vans that meet the same emission and range requirements.
• This plan offers important help for businesses that are moving to zero emission vehicles.

2. Home Charging Grants

The EV Chargepoint Grant helps homeowners and landlords put in home chargers. Those who qualify can get up to 75% off the installation costs, with a limit of £350. This grant is important for making EV infrastructure better for private owners.

3. Vehicle Excise Duty (VED) Exemption

Electric vehicles do not have to pay Vehicle Excise Duty (road tax) right now. This saves drivers as much as £165 each year. But, this exemption will stop in April 2025. After that, electric vehicles will have to pay the normal rate.

4. Salary Sacrifice Schemes

Businesses can give their employees electric cars by using salary sacrifice. This reduces taxable income and helps them enjoy the benefits of green growth. This plan can save a lot of money compared to buying a car outright.

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Impact of New Legislation on EV Sales and Discounts

The ZEV mandate and other new laws have affected the prices of electric vehicles. They have also changed how well these cars do in the market. While these laws aim to boost EV sales, they have caused many manufacturers to give big discounts. This happens as automakers hurry to meet their sales targets.

1. Discounts to Meet ZEV Mandate Targets

Car manufacturers need to meet a target of 22% EV sales for 2024. This target will increase to 28% the following year. They must work hard to meet these goals.

• Car makers are offering huge discounts, totalling £4 billion in 2024.
• The biggest discounts are for small vans, basic electric cars, and fleet vehicles.

2. Consumer Demand and Incentives

The move to zero emission vehicles has been slow for private buyers. This is mainly because they are too expensive. Without enough help from the government, people feel unsure about buying them.

Experts, like Lisa Brankin, who is the Chair of Ford UK, highlight how important it is to have incentives from the government.

3. Upcoming Changes in Taxation

The end of VED exemptions in 2025 may affect how affordable electric vehicles (EVs) are. Also, the upcoming change in benefit-in-kind (BiK) taxation for EVs will likely impact fleet sales. This could substantially change new car sales.

How to Save Money on EV Car Insurance

With more people using zero emission cars, the insurance costs for electric vehicles can be different. Here are some ways you can save:

1. Compare Policies: Use tools like Free Price Compare to find cheap plans made for electric cars.
2. Opt for EV-Specific Cover: Look for plans that cover battery replacement and damage to chargers.
3. Low-Mileage Discounts: Pay-as-you-go plans can save money for city drivers who use their cars less.
4. Safety Features: Cars with great safety features like collision avoidance may get discounts.
5. Multi-Car Policies: Combine plans for families or businesses that have several electric cars.

How do countries enforce ZEV mandates?

Countries enforce ZEV mandates through a variety of measures, including setting quotas for the number of zero-emission vehicles that must be sold, offering incentives for ZEV purchases, imposing fines on non-compliant manufacturers, and investing in ZEV infrastructure like charging stations.

FAQs About the ZEV Mandate and EV Adoption