The Government is expected to water down its ZEV mandate targets this week, sparking a fierce division between automakers, the EV sector and climate lobbyists.

News of the much-rumoured U-turn on the car and van sales quotas was broken over the weekend by the Guardian, which revealed that First Secretary of State Louise Haigh is poised to finalise changes that would cut the 2030 targets down to potentially around 60% for cars.

The updates will provide significant relief to car and van manufacturers struggling with weak consumer demand but have triggered fierce policy disagreements within Whitehall and in the EV and auto sector.

Officially entered into law on 3 January 2024 under the Conservatives, the ZEV mandate sets increasingly stringent annual electric vehicle sales targets for manufacturers on the path to 2030, requiring each individual OEM to meet its own volume-based targets or use regulatory flexibilities to avoid severe financial penalties. Labour’s recent consultation explored four alternative policy paths to adjust the ZEV mandate rules heading into 2027 along with the option to significantly expand multi-year compliance flexibilities.

Under the original legislation, the headline EV sales quota for carmakers was legally mandated to rise from 22% in 2024 to 80% by 2030. The proposed changes would see that 2030 target dialled back by a quarter to roughly 60%, while van quotas – originally targeted to reach 70% by the end of the decade – are also expected to be scaled down significantly to ease pressure on van manufacturers and commercial fleets. Labour is also expected to extend regulatory flexibilities until 2034.

Auto brands legally met their targets in 2024 and 2025 via flexibilities and are expected to do so again in 2026. Data from the Society of Motor Manufacturers and Traders (SMMT) shows BEV sales among cars stood at a 26.6% share for the first 10 months of the year and is expected to reach 27.2% this year against the 33% headline target. In contrast, the commercial van sector is facing a severe demand deficit. The current BEV share stands at 11.0% YTD (with October seeing a monthly record of 12.9%) against a target of 24%.

Automakers have repeatedly called for action on the ZEV mandate. The SMMT has said that the regulation is running ahead of natural market demand – particularly for electric vans. This is forcing companies to subsidise the market at unsustainable levels, undermining residual values and weakening the UK as both a market and a manufacturing base. The industry body wants substantive reform effective immediately.

The British Vehicle Rental & Leasing Association (BVRLA) has said its members share “deep concern” about the pressures the ZEV transition is placing on their businesses. While the rental sector wants the 2030 EV quotas slashed, leasing firms are desperate to protect vehicle residual values without destroying consumer confidence in the transition. Both sectors agree that commercial vans face the hardest operational barriers, meaning the Government must urgently relax future van targets.

But debate over the ZEV mandate has triggered deep divisions among MPs, and the charging sector, climate groups and wider campaigners have also hit back at the proposed changes.

Ben Plowden, chief executive of Campaign for Better Transport, said: “Weakening the ZEV mandate would be a major setback for cutting transport emissions. Transport remains the UK’s biggest source of greenhouse gas emissions, and the ZEV mandate is one of the most important policies we have for decarbonising road traffic and meeting our climate targets.”

The charging industry rejected claims that the UK’s network is unready for the transition.

Delvin Lane, CEO of ultra-rapid charging giant InstaVolt, said: “We recognise there is a balance to be struck between protecting jobs in the automotive industry and maintaining ambitious targets for the transition.

“But let’s be clear: charging infrastructure is not the problem. The industry needs to stop using it as an excuse for weakening the rules. We are delivering infrastructure ahead of schedule, investing billions and building a network ready to support more drivers making the switch.

“Almost one in three new cars sold in October was fully electric. The market is moving, and drivers can have confidence that the charging infrastructure is there and will continue to grow.”

Thom Groot, CEO of The Electric Car Scheme, said diluting the ZEV mandate was a massive ‘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 would only benefit those who haven’t taken them seriously from the start. I would like the Government to channel the momentum already gained into focusing on innovations and incentives that make EVs more accessible.”

Meanwhile, climate analysts warn that slowing down the transition will hit consumers directly in the pocket.

Izzy Romilly, head of transport at non-profit think tank and research Energy and Climate Intelligence Unit (ECIU), said: “This will cause alarm both for those concerned about climate change, but also those facing the cost-of-living crisis, where the shift to EVs – new or second hand – is a practical way that families and businesses can insulate themselves from volatile petrol and diesel costs.

“Some claim that the race to electrify will hurt British business, but with the world moving steadily towards EVs, it’s the failure to electrify that will hit the industry hardest. Most of the cars we build are sold abroad, to countries where EV sales are rising, while petrol and diesel cars are on the way out, with global sales peaking way back in 2017.”

Romilly also highlighted that despite claims that the mandate is unrealistic, manufacturers met their EV sales targets for the last two years and one in three new cars sold in the UK were electric in October.

“On the heels of the UK’s hottest ever summer and months of drought, watering down the UK’s single largest policy for cutting emissions having also cut funding for electric heat pumps would be an odd look,” she stated.

And Dominic Phinn, head of transport at the Climate Group, said: “It truly beggars belief that in the week of COP31, which has electrification at its core, the UK government seems to consider weakening one of its most successful electrification strategies. The ZEV Mandate is supported by a wide range of UK businesses that are rapidly electrifying their fleets to protect themselves from energy price shocks and cut operating costs. It provides the certainty to invest with confidence in electric fleets and charging infrastructure, providing the very foundation for competitive, future-proof road transport in this country. That’s why businesses stand firmly behind it.”

EV100 members – including BT Group/Openreach, SSE, OVO, Mitie, Zenith and Grundfos – have previously defended the ZEV mandate as critical to their EV transitions.

The Government spokesperson has said it’s united in its commitment to the ZEV mandate and that “no decisions have been taken”.

A spokesperson stated: “We are committed to the phaseout of all new cars relying solely on petrol and diesel engines by 2030, and to 100% of new car and van sales being zero emission by 2035, and our legally binding net zero targets.

“Our consultation on the mandate will not change this, and will ensure we are taking a pragmatic and balanced approach to the ZEV transition.”