UK reviews first year of its strict EV policy

The UK’s first annual report on its zero-emission vehicle (ZEV) policy reveals that the new passenger car market achieved a compliance rate of 24.3 per cent in 2024 when accounting for all flexibilities — exceeding the mandated target of 22 per cent. The van market reached 11.5 per cent, compared to a target of 10 per cent. The Department for Transport concludes that the targets were met and sees no reason to amend the programmes. More details are provided below.

The evaluation specifically examined the ZEV Mandate, which sets annually increasing sales quotas for electric vehicles (EVs) for manufacturers, and the CO₂ emissions regulations, which apply to the CO₂ output of all other vehicles. The UK’s overarching goal is to end the sale of new petrol and diesel cars by 2035. Both programmes – for passenger cars and vans – are designed to facilitate the phase-out of internal combustion engines.

The report details the tools manufacturers used in 2024 to meet the requirements. In addition to increasing EV sales and reducing the sale of internal combustion vehicles, companies had access to several ‘flexibility mechanisms’, such as trading emissions certificates, banking credits for future years, and converting CO₂ savings into additional ZEV credits. The UK also permits a form of ‘credit borrowing’: manufacturers can use certificates from future years to comply with current regulations, subject to repayment with an additional 3.5 per cent interest.

The Department for Transport notes that zero-emission vehicles accounted for 19.8 per cent of total market sales in 2024. For vans, zero-emission vehicles made up 6.8 per cent of registrations. The average emissions of all other vehicles decreased by 7.3 per cent for passenger cars and 7.6 per cent for vans, primarily due to increased sales of hybrids and vehicles with more efficient internal combustion engines. Additionally:

• In 2024, UK passenger car manufacturers used the mechanism for converting CO₂ emissions into ZEV credits to generate the equivalent of 4.7 per cent additional ZEV registrations. For vans, this mechanism secured an additional 5.3 per cent of ZEV registrations.
• Passenger car manufacturers ‘borrowed’ the equivalent of 1.2 per cent through the aforementioned credit mechanism, while van manufacturers borrowed 0.2 per cent.
• Manufacturers traded approximately 39,000 passenger car certificates, equivalent to 2.1 per cent of total passenger car registrations. For vans, around 200 certificates were traded, representing 0.1 per cent of van registrations.

When combining actual vehicle sales with the equivalents, the result is the aforementioned compliance rate of 24.3 per cent zero-emission vehicles (ZEVs) for passenger cars and 11.5 per cent for vans. The Department for Transport has pointed out that no manufacturer was required to pay penalties; furthermore, the report indicates that some manufacturers succeeded in banking emissions credits for use in future programme years. This outcome contrasts with ongoing demands from UK manufacturers to relax the programmes or review them earlier than planned, as the pressure on carmakers – partly to artificially stimulate demand through high discounts – remains significant.

As the portal Auto Express reports, the government recently rejected calls to bring forward the review of the programmes. This decision came just hours after the automotive industry had urged an urgent review of the ‘overly optimistic’ and rapidly increasing mandated quotas for new electric vehicle registrations.

Originally scheduled for 2027, the government had already agreed late last year to begin the review at the end of 2026 and publish the findings in 2027. This timeline remains unchanged, as the Department for Transport, Aviation, and Decarbonisation refuses to consider an earlier date.

“[The review] is beginning this year, but early 2027, we feel, is the right point to make sure that we can test properly where the pressure points lie in the ZEV mandate and make sure that it continues to work for manufacturers,” Minister Keir Mather is quoted as saying. “The government is incredibly clear that the EV transition is something that we stand resolutely behind.” The review is not expected to alter the planned phase-out of new internal combustion engines by 2035 but may modify the pathway to achieving it.

As early as a year ago, the government demonstrated its openness to adjustments while maintaining its overarching policy. In April 2025, it reduced fines for manufacturers failing to meet interim targets, for example. This followed industry lobbying: Stellantis, for instance, had threatened to close its van plant in Luton rather than invest in the planned production of electric vans—and the plant was indeed closed at the end of March 2025.

am-online.com, assets.publishing.service.gov.uk (PDF), autoexpress.co.uk