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The UK government has unveiled revised ZEV mandate regulations, aiming to balance the phase-out of petrol and diesel cars with practical industry support. The new regulations introduce flexibilities that allow manufacturers more time and options to comply, easing the transition towards net zero emissions.
Extended Deadline for Hybrid Cars
The 2030 phase-out of new petrol and diesel cars remains, but there is now an allowance to sell hybrid cars until 2035. For vans, all powertrains (petrol, diesel, hybrid, and plug-in hybrid) are allowed until 2035 as well.
Reduced Fines for Non-Compliance
The government has reduced fines for non-compliance by about 20%, making it less expensive for manufacturers to miss their ZEV targets. For instance, the fine per unit over the required ZEV target has been reduced from £15,000 to £12,000 for cars.
Flexibility for CO2 Savings from Hybrids
The flexibility allowing manufacturers to generate "credits" by improving emissions of non-ZEV vehicles (relative to 2021 baseline) is extended from 2026 to 2029, rewarding CO2 savings from hybrids. Credits can be transferred between car and van sales, providing manufacturers with more options to meet the mandate.
Caps and Thresholds for Flexibilities
Caps will be applied to ensure credibility of these flexibilities, but limits on the use of emission improvements have been largely removed for the next five years. The UK government has also capped the flexibility in its ZEV mandate and extended the period for credit borrowing from other manufacturers to 2029, with the threshold dropping each year.
Kia's Adjusted EV Sales Targets
South Korean automaker Kia has lowered its sales targets for EVs from 1.6 million to 1.26 million annually by 2030. Across all drive types, Kia expects to sell 4.19 million units by 2030, with 1.26 million being BEVs. The company plans to sell 1.07 million 'xHEVs' which include hybrids with different levels of electrification.
Wayve AI's International Expansion
Wayve AI, a UK-based company developing autonomous driving technology, has secured significant investment and partnerships. Last year, Wayve raised more than $1 billion (€879.37 million) from investors including SoftBank, Microsoft, and Nvidia. The company has also agreed to a strategic partnership with Nissan, marking a key milestone for Wayve as it aims to accelerate its international expansion. Nissan has announced it will launch its next generation ProPILOT technology from 2027.
Supporting the UK's EV Sector
The updated ZEV mandate regulations are expected to drive significant investment in UK EV manufacturing. Recently, £23 billion was announced, including gigafactories and new EV model development by companies like Nissan, Tata, and BMW. The government’s £2.5 billion DRIVE35 program further supports innovation and manufacturing growth in the EV sector, combined with trade deals and industrial strategies to enhance competitiveness.
In summary, the updated ZEV mandate regulations reinforce the 2030 petrol/diesel ban but introduce flexibilities that allow manufacturers more time and options (like hybrids) to comply, aiming to support the sector’s transformation without abrupt market disruption while maintaining the net zero goals.
- The revised ZEV mandate regulations in the UK now permit manufacturers to sell hybrid cars until 2035, providing an extended deadline for the automotive industry.
- The government has reduced fines for non-compliance with the ZEV mandate, making it financially less burdening for businesses to miss their targets.
- The flexibility for manufacturers to generate credits by lowering emissions from non-zero emission vehicles has been extended until 2029, benefiting the technology sector and supporting CO2 savings from hybrids.
- The UK government has implemented caps and thresholds for these flexibilities to ensure credibility, while also extending the period for credit borrowing from other manufacturers to 2029.
