The Zero Emission Vehicle Mandate is set be changed to make it easier for industry to upgrade to make electric vehicles.
Prime Minister Sir Keir Starmer says the new era means the UK must go ‘further and faster’ on the Plan for Change to spur growth that puts more money in working people’s pockets.
British car brands like Rolls-Royce, Vauxhall and Land Rover are being given certainty, stability and support as the Prime Minister sets out plans to back industry in the face of global economic headwinds today.
The Prime Minister will say the new era of global insecurity means that the government must go further and faster reshaping our economy through the Plan for Change.
The Zero Emission Vehicle Mandate will be changed to make it easier for industry to upgrade to make electric vehicles while delivering the manifesto commitment to stop sales of new petrol and diesel cars by 2030, which will help even more British consumers access the benefits of cheap to run electric vehicles.
The package will be backed by a modern Industrial Strategy, to be published in full this spring, which will help British businesses realise the potential of industries of the future.
The changes, which reflect extensive consultation, will help the car industry by:
- increasing flexibility of the mandate for manufacturers up to 2030, so that more cars can be sold in later years when demand is higher
- allowing hybrid cars – like the Toyota Prius and Nissan e-Power – to be sold until 2035 to help ease the transition and give industry more time to prepare
- continuing to boost demand for electric vehicles, on top of the £2.3 billion we’re already spending on boosting British manufacturing and improving charging infrastructure – with a new charge-point popping up every half an hour
- pressing on with tax breaks worth hundreds of millions of pounds to help people switch to electric vehicles
Support for the car industry will be kept under review as the impact of new tariffs become clear.
This package is the latest in a series of pro-growth measures that the Prime Minister is announcing to counter the impact of new global headwinds and build a strong, resilient economy with more well-paid jobs.
Prime Minister, Keir Starmer, said:
“Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change. I am determined to back British brilliance. Now more than ever UK businesses and working people need a government that steps up, not stands aside.
“That means action, not words. So today I am announcing bold changes to the way we support our car industry.
“This will help ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence, as well as back with pride. And it will boost growth that puts money in working people’s pockets, the first priority of our Plan for Change.”
Transport Secretary, Heidi Alexander, said:
“We will always back British business. In the face of global economic challenges and stifled by a lack of certainty and direction for too long, our automotive industry deserves clarity, ambition and leadership. That is exactly what we are delivering today.
“Our ambitious package of strengthening reforms will protect and create jobs – making the UK a global automotive leader in the switch to EVs – all the while meeting our core manifesto commitment to phase out petrol and diesel vehicles by 2030.
“Once again, the Prime Minister’s decisive and bold actions show how we’re on the side of British business while harnessing the opportunities of the zero emissions transition to create jobs and drive growth, securing Britain’s future, and delivering our Plan for Change.”
In recognition of the changing global trading landscape, the government has worked with the industry to both strengthen its commitment to the phase out and introduce practical reforms to support industry meet this ambition.
Demand for electric vehicles is already rising, with the latest data showing sales in March were up over 40% on last year, which will help with the transition.
There is a huge opportunity to be harnessed here – with the UK being the largest EV market in Europe. Over £6 billion of private funding is lined up to be invested in the UK’s chargepoint roll-out by 2030. Since July, the government has also seen £34.8 billion of private investment announced into UK’s clean energy industries.
The updated ZEV Mandate will ensure flexibilities support UK manufacturers by:
- maintaining the existing phase-out dates and headline trajectories for cars and vans
- extending the current ability to borrow in 2024-26, to enable repayment through to 2030
- extending the current ability to transfer non-ZEVs to ZEVs from 2024-26, out to 2029, giving significant additional flexibility to reward CO2 savings from hybrids – caps will be included to ensure credibility
- introducing a new flexibility by allowing for van to car transfer, i.e. 1 car credit will be exchanged for 0.4 van credits, and 1 van credit will be exchanged for 2.0 car credits
The wide-ranging package of measures introduced today will also exempt small and micro-volume manufacturers – supercar brands including McLaren and Aston Martin – from the Mandate targets, preserving some of the UK car industry’s most iconic jewels for years to come.
Vans with an internal combustion engine (ICE) will also be allowed to be sold until 2035, alongside full hybrids and plug-in hybrid vans.
Employing 152,000 people and adding £19 billion to our economy, the UK’s automotive industry is a huge asset to our nation – and the transition to zero emissions is the biggest opportunity of the 21st century to attract investment, harness British innovation, and deliver growth for generations to come.
(Pic: Parliament UK)
