The UK’s fleet leasing, rental and logistics sectors have demanded an overhaul of the UK’s ZEV mandate in their official responses to the consultation on the zero-emissions car
The UK’s fleet leasing, rental and logistics sectors have demanded an overhaul of the UK’s ZEV mandate in their official responses to the consultation on the zero-emissions car and van sales quotas.
Submitting its official member-backed response prior to the close of the consultation last week, the British Vehicle Rental and Leasing Association (BVRLA) outlined deep concerns over the intense economic pressures that the zero-emission transition is placing on businesses.
Discussions, workshops and surveys among the association’s leasing and rental members revealed deep concerns about the pressures the ZEV transition is placing on their businesses and a shared agreement on the measures needed to strengthen demand.
Rental members reported weak customer demand, operational barriers and short-term exposure to depreciation. Given these challenges, those representing a majority of the rental car fleet see no viable path to meeting the current 2030 trajectory. The rental sector’s top priority is a reduction in the 2030 mandate levels.
For leasing companies, the priority is to sustain confidence in electrification and avoid abrupt policy reversals that could undermine investment, while simultaneously managing falling residual values.
These challenges are heightened among both sectors when it comes to LCVs. A van is a working asset where commercial value and operational productivity go hand in hand. High barriers remain across both, which needs to be acknowledged in the trajectory and policy direction that follow this consultation.
The trade body’s submission reflects these contrasting sector experiences. While members remain fully committed to electrification, the BVRLA stresses that headline uptake figures disguise the acute economic pressures facing individual market segments.
The Government’s consultation explores four alternative policy paths to adjust the ZEV mandate rules heading into 2027. Alongside the existing trajectory, ministers evaluated cutting 2030 electric sales quotas down from 80% to as low as 50% for cars, and slashing van targets from 70% down to 40% to account for slower commercial demand. The review also weighed a separate option to maintain the headline targets while significantly expanding multi-year compliance flexibilities, alongside proposed overhauls to credit banking, non-compliance penalties and the ‘utility factor’ calculations used for plug-in hybrid vehicles.
The Society of Motor Manufacturers & Traders (SMMT) has labelled the current EV sales targets as “unrealistic” and says they’re “eroding profitability, diverting resources and undermining the attractiveness of the UK as a place to invest”. The association for the motor industry has said the ZEV mandate review must realign the EV trajectory to government’s industrial and growth ambitions. It’s stressed that meaningful reform of the mandate will deliver reindustrialisation as well as decarbonisation.
Logistics UK also called for action on the ZEV mandate quotas in its official consultation response, urging ministers to create an operational environment that will make electrification commercially viable and achievable for the logistics sector.
The business group reiterated how the sector fully supports decarbonisation and the transition to zero-emission vehicles but outlined how policy ambition must be matched by delivery.
“The logistics sector is committed to decarbonisation, and businesses are already investing significantly in electric vehicles and charging infrastructure, but government policy must reflect operational reality,” commented chief executive Ben Fletcher. “The electrification transition needs to start from the ground up to give businesses the confidence and practical means to invest in zero-emission fleets without compromising their competitiveness.”
Logistics UK’s submission highlights growing concerns from logistics operators and urges the Government to prioritise faster and more affordable grid connections for logistics sites; maintain meaningful, multi-year grants for zero-emission vans; improve accountability among distribution network operators (DNOs); expand high-powered charging infrastructure suitable for commercial vehicles and address the UK’s high cost of electricity – since 2020, UK industrial electricity prices have been the most expensive in the G7.
“Electrifying domestic vehicles is a very different challenge to electrifying the logistics network of depots and distribution centres that keep the country supplied, and policy goals must recognise the different pace of decarbonisation. Logistics operators need to consider vehicle range, payload and overall customer needs, and for many businesses, particularly those with larger vans or in rural areas, conditions are not yet commercially viable. With logistics businesses operating on tight margins, the transition needs to be supported by a clear and realistic policy framework that reflects the operational challenges facing the sector.
“The challenge is not a lack of ambition from industry,” continued Fletcher, “but it is the lack of charging infrastructure, grid capacity and affordable electricity that is inhibiting the adoption of greener electric fleets. Where electrification is mandated, government must ensure logistics businesses are prioritised for electricity access and grid upgrades.
“Decarbonising logistics is fundamental to the decarbonisation of all sectors, and the success of the ZEV mandate will ultimately depend on creating the conditions that make zero-emission vehicles practical, affordable and attractive for the businesses expected to buy them.”
However, any potential watering down of the mandate faces fierce opposition from green campaigners, infrastructure firms and health leaders, who warn that changing course could have severe ramifications.
Analysis from the Energy and Climate Intelligence Unit (ECIU) warns that diluting the ZEV mandate will severely drive up emissions. The independent non-profit think tank says that dropping the 2030 targets moderately from 80% to 70% would trigger a carbon spike greater than burning all the gas in the Jackdaw field. In a worst-case scenario where targets are slashed to 50%, the resulting 147 megatonnes of additional carbon would equal more than half of the entire lifetime emissions of the Rosebank oil field.
Concurrently, a broad coalition of 30 major climate, transport and health organisations – including the WWF, Greenpeace and the Clean Air Fund – has condemned any softening of the targets as an unnecessary act of “economic self-harm”. The alliance highlights that backtracking to appease automotive lobbying will slow down billions in green industrial investment while inflating driving costs, with health data suggesting weakening the mandate could carry up to £882m in unnecessary NHS healthcare costs and lead to thousands of lost life-years.
Alongside this, trade association BEAMA adds that reducing the 2030 zero-emission target to 50% will deeply damage the UK’s green infrastructure ecosystem, potentially resulting in 1.7 million fewer home charge point sales by 2034, wiping out £1.6bn in manufacturing revenue and stripping 12GW of flexible smart-charging capacity from the electrical grid.
And compounding these infrastructure fears, electric vehicle charging provider Zest has said that watering down net-zero targets risks driving international funding away from the UK. Zest CEO Robin Heap stressed that reducing market growth signals creates institutional instability at the worst possible moment, threatening to disrupt multi-year planning timelines essential for site acquisition and to send critical capital toward more predictable European markets.
The Government made a commitment in last week’s Autumn Budget to publish its response to the ZEV mandate review consultation by the end of the year.
