Introduction:
The UK government’s zero-emission vehicle (ZEV) mandate, introduced at the start of this year, has been described as a remarkable intervention in the automotive industry. The legislation aims to ensure that the country achieves its goal of being net zero on carbon emissions by 2050. Car manufacturers are required to sell an increasing proportion of zero-emission vehicles annually, with the target set at 22% in 2024 and reaching 80% in 2030. Failure to comply with the mandate results in a fine of £15,000 per non-compliant car sold. This article explores the details of the ZEV mandate and its implications for car buyers and manufacturers.
What is the ZEV (zero-emission vehicle) mandate?
The ZEV mandate goes beyond a simple sliding scale of electric car sales that each car maker must achieve each year. It is part of the UK’s commitment to reduce carbon emissions and focuses on road transport as the biggest-emitting sector. The legislation requires car makers to sell an increasing proportion of zero-emission vehicles annually, with the target set at 22% in 2024 and reaching 80% in 2030. A zero-emission vehicle is defined as having zero CO2 emissions at the tailpipe and a driving range of at least 100 miles on the WLTP test cycle. Car makers must also provide a battery warranty of eight years or 100,000 miles and offer a replacement battery if it falls below 70% capacity within that time.
Annual mandate targets to 2035:
The ZEV mandate sets specific limits on the maximum percentage of non-zero-emission vehicles that each manufacturer can sell. The targets gradually increase each year, with the aim of reaching 100% zero-emission vehicles by 2035. However, there is no formal ban on the sale of new internal-combustion-engine cars from 2035, only a requirement for 80% of new car sales to be zero-emission by 2030. The legislation also allows for trading between the ZEV mandate and the CO2 emissions requirements, giving manufacturers some flexibility in meeting their targets.
Implications for car buyers:
For car buyers interested in electric vehicles (EVs), the ZEV mandate brings positive news. Manufacturers are offering enticing finance and leasing packages to incentivize EV purchases. Some manufacturers have reduced the list prices of their EVs and offer significant deposit contributions. Leasing deals for electric cars can also result in substantial savings compared to PCP finance deals. However, for those not looking to go electric, it may become more challenging to purchase combustion-engined cars as manufacturers may restrict sales of such vehicles to meet their ZEV targets.
Insights and analysis:
The ZEV mandate is an ambitious legislation that aims to accelerate the adoption of zero-emission vehicles in the UK. It aligns with the country’s commitment to reducing carbon emissions and achieving its net-zero target by 2050. However, the legislation presents challenges for car manufacturers, who must navigate complex regulations and meet increasing annual targets for zero-emission vehicle sales. The ability to pool, bank, borrow, and trade emissions provides some flexibility but also adds another layer of complexity to compliance. Manufacturers face fines of £15,000 per non-compliant car sold, incentivizing them to meet their targets or buy credits from others that overperform on the ZEV mandate.
Conclusion:
The UK’s ZEV mandate is a significant intervention in the automotive industry, aiming to drive the adoption of zero-emission vehicles and reduce carbon emissions. The legislation sets increasing annual targets for zero-emission vehicle sales, with the goal of reaching 80% by 2030 and 100% by 2035. Car buyers interested in electric vehicles can take advantage of enticing finance and leasing packages offered by manufacturers. However, those looking to purchase combustion-engined cars may face restrictions as manufacturers strive to meet their ZEV targets. The ZEV mandate presents challenges and opportunities for both car manufacturers and buyers as the UK works towards its net-zero carbon emissions goal.
