ZEV Mandate explained: What is it and how does it affect me

By Tom Seymour

Last updated: May 14th 2024

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The zero-emission vehicle (ZEV) mandate was introduced this year by the UK government to set out a roadmap over the next decade for transitioning all new cars and vans sold to be zero emissions by 2035.

It means vehicle manufacturers have to make sure a certain percentage of all their new sales are zero emissions, most likely using electric vehicle technology (EV) or they can face being fined.

How does the ZEV Mandate affect new car buyers?

Pictured: Nissan Leaf Mk2

It only really affects you if you're looking to buy a new vehicle. The ZEV does not affect used car sales, so if you wanted to continue to buy a used petrol or diesel car between now and 2035, as well as afterwards, you could do.

However, as car brands will stop selling petrol and diesel cars in the UK from 2035 onwards, used petrol and diesel vehicles will eventually start to disappear from UK roads in the years to come (other than carefully looked-after future classics...)

If you're buying a new car the percentage number of vehicles sold as EVs will gradually increase between now and that 100% ZEV mandate deadline of 2035.

This means each time you visit a showroom the dealership staff and car brands are likely to be thinking about whether an EV might be right for you, particularly if you might not have considered zero-emission vehicles before.

When does the ZEV mandate take place?

Pictured: Hyundai IONIQ 5

The ZEV mandate has been in place since January 3, 2024.

This year the target requires more than a fifth (22%) of cars and 10% of vans sold by manufacturers to be electric.

The target rises to 28%, 33% and 38% over the next few years and so on up to requiring 80% of new cars and 70% of new vans sold in Great Britain to be zero emission by 2030, increasing to 100% by 2035.

There is a fines system in place that would see brands charged £15,000 for every new car sold that doesn't comply with the ZEV mandate.

Van manufacturers have to pay £9,000 per vehicle this year in fines and this then rises to £18,000 per vehicle from now until 2035.

It's supposed to be incentivising car brands to push ahead with a higher share of EVs in their sales mix so they can avoid these costly fines.

However, there is a bit of a tricky system in place that offers flexibilities and credits to support manufacturers that sell a low volume of EVs.

Any manufacturer selling more EVs than required (and in turn selling fewer non-EVs than they should have done) will have spare credits that they can sell on the open market to other car brands that haven't sold enough EVs.

It's all a bit complicated, but essentially, the UK government is trying to push the market to increase the number of new EVs on the road and car manufacturers are generally trying to hit those ZEV mandate targets that have been put in place.

Which car brands at likely to offer discounts?

Pictured: MG4

Car brands always run quarterly discounts to tempt customers every three months. These offers will run regardless of fuel type.

These promotions can sometimes even run from month to month depending on the targets a car manufacturer is trying to achieve.

The retail market (people that are buying cars for their own personal use rather than a company car or business vehicle) has been slightly subdued due to the EV market is now moving from the early adopter and enthusiast stage to more mass market customers.

It was hoped the UK government would introduce new grants and incentives for retail customers to boost EV sales, but for the time being there will be no additional financial support for the retail market to help with the transition to electric vehicles.

However, car manufacturers will likely be offering discounts and incentives on their zero-emission vehicles in order to try and hit these zero-emission vehicle mandate share targets and boost retail demand.

These might come in the form of deposit contributions (which can sometimes knock thousands of pounds off the price of a new EV), or in 0% finance.

Premium brands typically have more room to manoeuvre in terms of how much margin they can sacrifice to offer up a discount, but it's always worth checking every brand to see what the best offer is and that might mean looking at different ways of funding your new EV too.

If you type in UK new car offers and the brand you're interested in, you'll be able to easily find the latest retail offers that are available. Smart Home Charge highlights personal contract hire, personal contract purchase and salary sacrifice deals on a regular basis.

Does the ZEV mandate affect home charging?

Pictured: Easee One EV charger

Only in that there will likely be a lot more new EVs hitting the roads in the UK this year and so more people will be looking for a smart home charger to be installed.

There is also the worry that more EVs needing to be charged will put strain on the UK's electricity grid.

However, smart scheduling and clever EV specific energy tariffs can help balance out energy demand.

According to National Grid, the highest peak electricity demand in the UK in recent years was 62GW in 2002.

Since then, the nation’s peak demand has fallen by roughly 16% due to improvements in energy efficiency.

Even if we all switched to EVs overnight, National Grid estimates demand would only increase by around 10%. So we’d still be using less power as a nation than we did in 2002 and this is well within the range the grid can capably handle.

What does the ZEV mandate mean for fleet owners?

Pictured: Vauxhall Vivaro-e

Most fleets, particularly medium and large businesses, are already switching to electric vehicles. This is to take advantage of lower running costs, lower taxation and to reach their sustainability goals.

The ZEV mandate will affect fleets in a similar way to all new car and van customers in that the pool of petrol and diesel vehicles they can purchase will continue to reduce as car brands steadily increase their electric sales.

Fleets will also be incentivised by leasing companies and car manufacturers to take a higher percentage of EVs as part of their new orders in the coming years as another way to help reach those ZEV mandate targets.

Switching to electric vans is probably one of the biggest challenges facing fleets right now as there had historically been a smaller range of EVs available in this market.

However, more and more electric vans are becoming available with longer zero emission ranges that will make it easier to make the switch to electric.

Are there any government grants for buying new electric vehicles?

Pictured: BMW i4

There are no grants currently available towards buying a new electric car for retail customers.

As mentioned above, the industry has been hoping for UK government support to help with new grants and this may change in the future, but it currently has no plans to help with any further funding for electric cars.

However, there are still schemes in place to lower the upfront and running costs of owning an electric vans, with a grant of up to £2,500 for small vans and £5,000 for large vans until at least 2025 and £350 off the cost of homeplace chargepoints for people living in flats.

What other help is available for fleet owners?

The UK government has a few initiatives in place to help support businesses and fleets with adopting more electric company cars and vans.

Workplace charge scheme

The Workplace Charging Scheme (WCS) is Government funded scheme that provides financial support to businesses wishing to have electric vehicle charge points installed at their work premises.

The WCS is a voucher-based scheme that contributes up to £350 towards the upfront costs of a car charging point purchase and installation.

It is managed by the Government OZEV department (Office for Zero Emission Vehicles).

Plug-in vehicle grant

The plug-in van grant (PIVG) was launched in 2012 to help bridge the price gap between the cost of ultra-low emission vans and diesel vans. It was extended to trucks, also referred to as heavy goods vehicles (HGVs) in 2016.

The maximum discount available for some small vans is £2,500, while large vans can get up to £5,000, small trucks can get £16,000 and large trucks can get £25,000.

ULEZ scrappage scheme

The Mayor of London has funded a £210 million scrappage scheme, which provides financial assistance to help eligible London residents, businesses and charities, to scrap, donate or retrofit vehicles that don't meet the Ultra Low Emission Zone (ULEZ) emissions standards.

The ULEZ van and minibus scrappage scheme offers between £6,000 - £11,500 in funding and is open to small businesses (under 50 employees), micro businesses (with up to 10 employees), sole traders and registered charities.

All London residents can apply for up to £2,000 for scrapping or donating a car or up to £1,000 for scrapping or donating a motorcycle. For wheelchair accessible vehicles there is a payment of £10,000 to scrap or donate, or £6,000 to retrofit to the ULEZ standards.