The UK automotive industry has issued an urgent call for a strategic review of the Zero Emission Vehicle (ZEV) mandate, warning that current targets are based on “over-ambitious” assumptions that no longer reflect the economic reality of 2026.

New analysis from the Society of Motor Manufacturers and Traders (SMMT) – issued to coincide with its Electrified industry summit in London today (12 March 2026) – indicates that the UK is already falling short on current targets under the regulations.

The UK automotive sector trade body says the transition pathway targets under the ZEV mandate are “built on assumptions that have proved to be over-optimistic” and it warns that “the gap between policy ambition and market reality continues to widen”.

The SMMT wants an urgent review before targets accelerate exponentially from 2027.

Mike Hawes, chief executive, said: “Recognising the world of 2026 is not the one envisaged five years ago is not a retreat from ambition; it is a necessary step to achieving it. We need an urgent review that reflects today’s realities, that delivers decarbonisation not deindustrialisation and offers consumers the choice they have always expected.”

However, the Department for Transport (DfT) has said the UK’s EV transition is on track as it issues new data showing the industry is meeting targets.

The UK’s Zero Emission Vehicle (ZEV) mandate, launched in January 2024, requires car manufacturers to sell an increasing percentage of zero-emission vehicles, starting at 22% for cars in 2024, rising to 80% by 2030, and 100% by 2035, with separate, lower, rising targets for vans.

Manufacturers that fail to meet these annual targets face significant financial penalties although these fines were reduced following a review last year and, to aid compliance, manufacturers can bank credits from overachieving in previous years, transfer credits between cars and vans, or buy credits. The ZEV mandate was also revised a year ago to allow new hybrid cars and internal combustion engine (ICE) vans on sale until 2035.

The SMMT says the automotive sector remains fully committed to net zero but warns that despite having the highest battery electric vehicle (BEV) market share of any major European market, the UK is already falling short of its own expectations.

It also says the auto sector has had to bridge the gap between ambition and demand through “unprecedented” levels of discounting – more than £10bn over the past two years – and by using the mandate flexibilities.

SMMT figures show that in 2025, battery electric vehicles accounted for 23.4% of new car registrations – below the 28% ZEV mandate requirement, and short even of the 26% government originally expected would be achieved without regulation.

But provisional data from the Department for Transport for 2025 suggests manufacturers are again on track to meet the vehicle targets through sales and using the flexibilities available.

The DfT also confirmed that the car and van industry hit the 2024 ZEV Mandate targets through a mix of strong EV sales and use of built-in flexibilities – “showing the policy is working as intended and powering up the transition to electric”.

Keir Mather, Aviation, Maritime and Decarbonisation Minister, said: “These numbers show the transition to electric is on track. We’re investing over £7.5bn to support manufacturing, rollout chargers across the UK, and back British industry by boosting sales through our Electric Car Grant, helping over 75,000 drivers buy a new EV and save up to £3,750.”

The ZEV mandate targets continue to divide the wider industry, as well as drivers.

The Fast Charge, a British EV newsletter, reveals that nearly half of British people (48%) say the Government should keep its EV targets if cars become more affordable. Only three in 10 believe the targets should be moved, while one in four did not know.

ChargeUK has said that the auto sector’s call for the ZEV mandate targets to be amended is “unnecessary and unwise”.

Vicky Read, chief executive of the trade association for the UK’s EV charging infrastructure, said: “The ZEV mandate was only reviewed and amended last year and the most recent official figures, published today, show the auto industry is meeting its targets. Further messing with the mandate would have the effect of chilling charging investment, creating a real barrier to EV adoption and putting the transition at risk.”

Fiona Howarth, founder and director at Octopus Electric Vehicles, said that weakening the ZEV mandate now “would be the wrong approach”.

“Drivers are already choosing electric in growing numbers because the technology and economics make sense. The ZEV mandate provides the certainty that brings more choice and better value to drivers.”

She added: “The focus now should be on building confidence and accelerating the transition, not slowing it down.”

And Tanya Sinclair, CEO of campaign group Electric Vehicles UK, said: “Drivers are increasingly choosing electric because the technology, performance and running costs are better. Asking government to slow the rollout of EVs goes against what drivers want and risks reducing choice just as demand is growing. Weakening the ZEV mandate will not stop the transition. It will only leave the companies calling for it further behind.”

Colin Walker, head of transport at the Energy and Climate Intelligence Unit (ECIU), said: “It has been confirmed today that the car industry exceeded its EV sales targets in 2024. Analysis indicates it also exceeded them in 2025, and it already appears to be on course to do so again in 2026, despite some in the industry having inaccurately claimed otherwise.

“At a time when oil has hit $100 a barrel, petrol prices are going up and concerns are being raised about the UK’s energy security, weakening the mandate would slow the shift to EVs, and leave British drivers paying higher prices and exposed to this kind of global instability. It could also undermine investor confidence, and see billions of pounds of investment in the nation’s charging infrastructure, and wider economy, being held back.”

Finally, Toby Poston, chief executive at the British Vehicle Rental & Leasing Association (BVRLA), said the new data on the ZEV mandate “rubberstamps the progress we’ve seen in road transport decarbonisation”.

“Driven by BVRLA members and their customers, the new EV market has been on a long-term growth trajectory.

“The finish line remains miles away though, the hard yards lie ahead. Those cars will shortly be feeding the used EV market, which remains immature, unstable and unsupported. Auto Trader data shows EV values are down 7% year on year. Petrol values are steady. Rampant EV depreciation hurts the entire market and commands closer attention. The headline figures show we’re delivering growth, but it takes a holistic approach to create the stable market we all need.”