This is an executive summary. To find out more, download the briefing.
The UK ZEV mandate has successfully accelerated EV (battery electric) sales in 2024. Following two years of stagnating EV sales at around 16.5%, the first year of the ZEV mandate has propelled EV sales to a record breaking one-fifth of the market. This surge has positioned the UK as a leader ahead of other major European car markets, where stagnating EU regulation until 2025 has temporarily dampened growth in EV sales.
Despite initial claims from carmakers last year about potential difficulties in meeting the 2024 ZEV mandate, T&E’s analysis of 2024 sales data confirms that the automotive industry has successfully complied. UK EV sales reached 19.6% in 2024. Although below the headline target of 22%, this figure exceeds the 18% required for compliance when accounting for flexibilities lobbied in by the car industry.
At the individual manufacturer level, the analysis shows that all major carmakers have met the 2024 targets and Suzuki is the only carmaker which will need to purchase credits to comply due to no fully electric sales in the UK in 2024.
The regulation’s flexibilities have provided multiple pathways for compliance. Carmakers, except for purely electric manufacturers, have utilized a combination of strategies to meet the mandate and EVs sales have done the bulk of the heavy-lifting. For 2024 compliance Hyundai, Stellantis, BMW, Mercedes-Benz, SAIC, and Geely (Volvo, Lotus, Polestar) achieved compliance by both increasing EV sales and supplementing this with a reduction in the average emissions of their internal combustion engine (ICE) fleet.
VW, Renault-Nissan-Mitsubishi, Toyota, Ford, Tata Motors, Honda, Mazda, and Suzuki will supplement EV sales and emissions reductions by either borrowing credits from future years or purchasing them from overcompliant manufacturers. Suzuki is the only manufacturer that will not be able to borrow enough credits due to too low fully electric sales -Suzuki sold no fully electric cars in the UK last year- and will have to buy credits. Overall, there is an excess of 61,000 credits available for purchase, almost double the 30,000 credits required by carmakers who need additional credits to comply. Besides purely electric carmaker Tesla, overcompliant manufacturers such as BYD, BMW, Mercedes-Benz, SAIC, and Geely (Volvo, Polestar and Lotus) have surplus credits available for sale.
Last year was a great success for the UK EV market, demonstrating that the ZEV mandate is functioning as intended and indicating that robust regulations are crucial for accelerating EV sales. The UK has a higher EV sales share than any of the other biggest European car markets (France, Italy, Germany and Spain), highlighting strong and sustained consumer demand for EVs. Carmakers have also lowered prices and introduced more affordable models, such as the Citroen e-C3. This has happened as total car sales increased 2.6% year on year indicating that carmakers did not hold back on ICE sales to meet the mandate and that increasing EV sales go hand in hand with a growing car market.
Yet at the end of last month, the government launched a consultation on the ZEV mandate including questions on flexibilities which would weaken the stringency of the ZEV mandate. It is crucial that the government maintains the mandate’s ambition both for consumers and the future of the automotive industry. As the ZEV mandate increases in ambition over the coming years, carmakers plan to introduce over a dozen EV models cheaper than £23,000, improving overall EV affordability for drivers and further boosting demand for EVs. Yet if the ZEV mandate is weakened volumes will be prioritised for other markets and UK consumers will miss out.
It is also crucial for securing the £23 billion in EV investments committed to the UK between 2020 and 2023 as any weakening now will damage investment certainty and the UK’s credibility as an investment destination for clean tech. These investments are vital for driving economic growth and safeguarding high-quality UK automotive jobs. Any backtracking on the UK’s EV ambitions could also jeopardize the £6 billion investment pledged by the charging industry by 2030 for infrastructure roll-out.
Rather than weakening the ZEV mandate, the government should focus on:
-
1
Developing a robust automotive industrial strategy to maximize the economic benefits of the EV transition and enhance global competitiveness.
-
2
Support the growth of the affordable EV market by tackling barriers to EV adoption such as high charging costs and focusing any potential financial support for the industry at small, affordable EV models and increasing taxes on the most polluting new cars.
