The Government is poised to drastically dilute the UK’s Zero Emission Vehicle (ZEV) mandate after intense lobbying from carmakers and the Unite union, reports suggest.

The policy rollback was reported first by The Sunday Times, which revealed that Prime Minister Keir Starmer plans to overrule Energy Secretary Ed Miliband by slashing the 2030 all-electric sales target from 80% to 50%.

Despite previously holding to the originally scheduled policy reassessment date in 2027, the Government is reportedly accelerating the review amid mounting pressure from automotive leaders, who warned the strict mandate could drive vital investments out of Britain.

According to reports, the prospect of mass manufacturing job losses was a tipping point. Unite’s general secretary Sharon Graham explicitly told the paper that the existing mandate was “significantly contributing” to job losses, following warnings from the union last week that carmakers may stop selling vehicles altogether rather than risk heavy fines.

MPs on the Business and Trade Committee (BTC) have also urged the Government to bring forward the planned review of the ZEV mandate after warning of an “existential risk” to the UK’s automotive sector.

Reports suggest the upcoming policy relaxation will not be instantaneous; it will be subject to a formal consultation and requires the backing of devolved administrations. Despite the possible changes to the mandate, the overarching ban on the sale of new, purely petrol and diesel cars remains on the books for 2030.

A Department for Transport spokesperson said: “We’re committed to the ZEV mndate and are backing the transition to electric with £7.5bn to grow the market, boost EV manufacturing, increase sales and build up the UK charging network.

They added: “The UK EV market is strong, but we’ve always said we’ll review the mandate to ensure taking a pragmatic and balanced approach that supports British industry and continues to drive investment.”

A spokesperson from the Society of Motor Manufacturers and Traders (SMMT) said: “We have not seen any detail about what is being proposed but the industry has long called for a review and easing of the pressure on manufacturers for whom the cost of compliance is unsustainably high. There are ever more EVs on the market – over 160 at last count with more to come – so the industry’s commitment is not in doubt. But unless there is urgent relief of the mandate, which is still running well ahead of demand and about to ramp up, then the cost will be in jobs, investments and the viability of some businesses. We await the publication of any proposals.”

A potential reversal of the ZEV mandate faces fierce opposition from charging operators and green groups who argue it threatens billions in infrastructure investments and undermines legally binding climate targets.

The ZEV mandate first launched in 2024 under the former Conservative administration, requiring OEMs to sell increasing minimum percentages of zero-emission cars and vans.

The mandate, which is a strict regulatory framework backed by statutory legislation, demands automakers to hit yearly electric vehicle sales targets or face penalties. The mandate currently requires 33% of cars and 24% of vans sold by every manufacturer in the UK to be zero-emission in 2026. These targets scale annually, reaching 38%/28% (2027), 52%/35% (2028), 66%/46% (2029), and 80%/70% (2030).

OEMs that do not hit these targets face fines – set at £12,000 per vehicle for every non-zero-emission car sold outside of their allowed quota. However, manufacturers rarely pay these fines at face value due to government flexibility schemes. These built-in flexibilities include banking and trading credits, borrowing from future targets, car/van cross-trading and earning extra credits by achieving lower overall CO2 emissions across their traditional (non-ZEV) fleets.

Thanks to these regulatory flexibilities, the automotive industry faces a much lower barrier to compliance. According to data compiled by New AutoMotive, these allowances effectively lower the car industry’s real EV sales target for 2026 from the official 33% down to 24.6%. Given that the year-to-date market share sits comfortably at 24%, bolstered by a 27% surge in May, manufacturers are currently on pace to hit their targets for 2026 – mirroring their successful compliance in both 2024 and 2025 during the mandate’s initial rollout.

The National Franchised Dealers Association (NFDA) welcomed rumours of a ZEV mandate rollback after heavily lobbying for the change.

Sue Robinson, chief executive of the industry group, said: “NFDA has consistently supported the transition to zero-emission vehicles, but it is important that policy reflects market conditions and consumer demand.

“Franchised retailers have invested significantly in preparing for electrification, and any review of the ZEV mandate should help maintain momentum towards net zero while ensuring the transition remains realistic and achievable for consumers, manufacturers and retailers.”

But weakening the UK’s EV targets risks derailing massive economic growth across the wider automotive ecosystem.

According to a recent report by industry body ChargeUK, the electric vehicle charging sector is projected to inject £15.5bn into the economy and create thousands of jobs over the next decade. However, this critical infrastructure investment could immediately stall if the Government caves to pressure to dilute its current EV sales mandates.

Backing this sentiment, Matt Adams, head of electrical transport systems at trade association BEAMA, said: “At a time when the UK should be attracting capital into EV manufacturing and charging infrastructure, mixed policy signals risk making it harder to secure investment.

“That could slow progress, confuse consumers and make the UK a less attractive place to do business.”

Meanwhile, Thom Groot, CEO of salary sacrifice specialist The Electric Car Scheme, said diluting the ZEV mandate would be “a catastrophic own goal”.

“Consumer demand for EVs is growing, proof that the appetite is absolutely there. Through salary sacrifice alone, we’ve seen demand for new EVs double in the past year.

“Consumers and manufacturers alike need consistency to plan and invest. Watering down these targets only benefits those who haven’t taken them seriously from the start. I would like to see the Government channel the momentum already gained into focusing on innovations and incentives that make EVs more accessible.”

And Russell Olive, UK director of charging station management software firm Vaylens, said adjusting the ZEV mandate won’t remove the practical challenges businesses face when trying to electrify their vehicles.

“Policy can influence the pace of change, but successful electrification still depends on practical planning, better data and infrastructure that aligns with how vehicles are actually used.

“Many businesses aren’t being held back by a lack of ambition. They’re trying to understand which vehicles can transition today, what infrastructure they need and how charging fits around the way they operate.”

Meanwhile, Nick Connor, CEO of the Institute of the Motor Industry (IMI), stated that while reviewing the ZEV mandate target is welcome, the shift toward electric vehicles remains inevitable. He emphasised that the UK automotive workforce must prepare for this transition regardless of the final percentage.

Connor stressed that targets must be realistic for manufacturers, the supply chain, and consumers, but a lower target should not cause the sector to reduce investments in training.

“Every electric vehicle already on UK roads, regardless of what happens to the 2030 target, will need a technician qualified to work on it safely throughout its life. Yet our latest IMI EV TechSafe data shows that only around a third of UK technicians currently hold an EV qualification.

“The Government needs to ensure that while adjusting the targets, it puts a focus on skills training. And it needs to provide certainty. The automotive sector has endured too much switching of targets and deadlines in the last decade.”