The Government has said it’s open to working with vehicle makers on the ZEV mandate but won’t relax the sales targets, despite warnings from the auto sector.

Vehicle makers have called for “a pragmatic approach to regulation” but the Government has said it won’t weaken ZEV mandate targets

The Financial Times reported on Saturday that Nissan is “poised to warn ministers that the UK automobile industry had reached a ‘crisis point’ with jobs and investment at risk” if the rules were not relaxed. Stellantis has also warned it could pull production from the UK unless there is a change of heart.

Transport Secretary Louise Haigh said she would look at “flexibilities” but insisted that the mandate “will not be weakened”.

She told LBC Radio on Sunday: “There has been a downturn in demand on a global level so we are absolutely in listening mode – we want to discuss how the current situation is affecting them, but we are not diluting our ambition.

“I’m meeting with Nissan tomorrow, and the business secretary, the energy minister and I are meeting with a number of automotive manufacturers later in the week in order to discuss the challenges that they face on a global scale.”

The ZEV mandate became law in January 2024, levying increasingly stringent zero-emission vehicle sales quotas on manufacturers in the run-up to the ICE ban. For 2024, this is set at 22% of all new cars sold, rising every year thereafter until a target of 80% at 2030 and the 100% target by 2035.

Putting the targets into context, latest new car registration figures from the Society of Motor Manufacturers and Traders (SMMT) show fully electric cars accounted for 20.7% of the market in October and 18.1% for the first 10 months of 2024.

While van targets are lower, they are proving even problematic amid lacklustre demand. The goal is for 10% this year and 70% in 2030 but with the same 100% target by 2035.

But while 8.4% of the new van market was fully electric in October, this fell to 5.6% for the year to date; significantly below the level mandated.

The SMMT has also warned that even this level of fully electric vehicle sales has required manufacturers to subsidise the transition with billions in “unsustainable discounting”.

Earlier this autumn, the SMMT and 12 major vehicle manufacturers representing more than 75% of the market wrote to the Chancellor warning that the industry will likely miss the ZEV mandate targets.

The vehicle makers said that “a significant number of brands face the prospect of either buying credits from another company or paying swingeing compliance payments”. They called for consumer incentives, most of which weren’t actioned in the Budget, along with “a pragmatic approach to regulation”.

But the EV charging sector has called on the UK government to stay firm on the ZEV mandate as it warns that the strong electric vehicle take-up is required to ensure the industry can continue the infrastructure rollout.

Vicky Read, CEO of ChargeUK, said: “It’s been a [month] to celebrate clear, undeniable progress towards a greener transport future in the UK. New EV sales have risen by 24%, with second-hand EV sales up 57%.

“Despite this, today we have seen renewed calls from car manufacturers for the Government to weaken the regulations that underpin this growth.

“We couldn’t agree more that we need a healthy car EV market in the UK, but we also need a healthy charging market – both are essential if we are to achieve our economic and net zero goals. And that charging market needs certainty to continue to commit the investment that is currently driving 42% annual growth of the charging network.

“Now is the time for Government to hold its nerve, not to mess about with regulations that are doing their job.”

A consultation is still expected to open before the end of the year on Labour’s plans to restore the ICE car and van phase-out date back to 2030, after Rishi Sunak moved it forwards to 2035. The Department for Transport recently confirmed that the consultation will include views on hybrids though, which could stay on sale after the end of the decade.