Earlier this month, the government announced a review of the UK’s Zero Emission Vehicle (ZEV) mandate, with a view to easing annual EV sales targets between 2027 and 2035.
The industry consultation, which runs until 23 October 2026, follows concerns in the sector over market demand and compliance costs associated with the mandate, which requires van manufacturers to meet rising annual targets for sales of new zero-emission vans, reaching 100% by 2035.
Despite a record-high year-to-date share of 10.6% for new battery electric van sales, this is less than half the mandated target of 24% for this year, while next year’s objective of 34% and the stricter goal of 70% by 2030 look even less achievable.
Companies currently face heavy compliance costs if they miss their yearly targets, although the rules allow some banking and borrowing of credits across years to help adjust to shifting market demand.
It is clear therefore that government and industry share the same ambition, but the issue is how the right conditions can be created to achieve it.
Mike Hawes, SMMT Chief Executive, said the industry welcomed government’s consultation given the mandate had originally been designed “under very different conditions” when “cheaper energy, rapidly declining production costs, and more optimistic global demand” for EVs was expected.
He added: “Regulatory targets are now running ahead of current consumer demand, so this review is a timely opportunity to optimise the pace of change.
“That means a commercially sustainable transition that supports UK competitiveness, investment and jobs while delivering greater choice and affordability for motorists – with a rapid resolution needed to unlock those benefits for everyone.”
Elsewhere in the industry, Ford fully supports van electrification, but wants to see meaningful changes to policy that reflect how people actually buy and use its commercial vehicles today.
The company added that it is vital any changes are communicated in 2026, giving the industry and customers the clarity and lead time needed ahead of implementation from 2027 onwards.
Lisa Brankin, Chair and Managing Director at Ford Motor Company, said: “It is really positive to see the government launch this consultation on the ZEV mandate, and we welcome the opportunity to contribute.
“We’ve been raising these concerns with government for some time, and it’s encouraging to see that dialogue translating into action.
“This isn’t the end of the conversation – it’s only the start.
“We’ll continue sharing our experience of what the mandate looks like in reality, because getting this right isn’t just about targets on a page – it’s about making sure the transition to electric works for everyone: drivers, businesses and the industry that builds for them.”
The review is being carried out jointly by the UK government, Scottish Government, Welsh Government and Northern Ireland’s Department for Infrastructure.
It is asking the sector for input on whether the existing annual targets remain appropriate and is actively seeking views on the effectiveness of existing compliance flexibilities and potential new adjustments or policy options.
Stellantis currently has 60 fully electric vehicles in its line-up, including a range of Vauxhall, Peugeot, Citroën and Fiat electric vans, many of which are manufactured at its UK plant in Ellesmere Port.
The company was fully compliant with the ZEV mandate in both 2024 and 2025 and plans to be again this year.
However, despite growing interest in the benefits of EVs, the company said real customer demand is at odds with the mandate, meaning that compliance is coming at an increasingly significant and unsustainable cost.
Eurig Druce, SVP & Group Managing Director Stellantis UK, said: “We welcome the publication of the consultation to review the ZEV mandate.
“Stellantis fully supports the transition to electric vehicles and we look forward to a positive response from government to continue to support UK manufacturers as we transition to an electric future.”
Substantial progress on van electrification in the UK has already been made, with more than 40 different zero-emission models currently available and nearly two-thirds of all van models now offered as EVs.
However, current mandated sales targets were designed on the basis of optimistic expectations of market conditions that have not yet materialised.
Factors such as soaring energy prices, increased geopolitical instability, infrastructure roll-out challenges and weaker than expected operator demand have changed the landscape.
Fleet operators still face high upfront costs and charging challenges, along with practical concerns about payload and range.
Coupled with the slim operating margins which are commonplace in logistics, operators are therefore struggling to transition at mandated levels.
Hawes added that the industry remains fully committed to a zero-emission future, investing billions in new technologies, products and, along with government, consumer incentives.
He reiterated, however, that the regulation was conceived under very different conditions – cheaper energy, rapidly declining production costs and more optimistic global demand expectations.
“This is a regulation that increasingly dictates consumer choice – and therefore automotive companies’ future strategies and viability – so it must work for all involved”, he said.
British Vehicle Rental and Leasing Association (BVRLA) members hold approximately 750,000 electric vehicles on their balance sheets and have contributed more than £36 billion of investment in the UK’s decarbonisation journey.
Toby Poston, Chief Executive at BVRLA, said this investment demonstrates the sector’s commitment, and the consultation provides a vital opportunity to take stock of the UK’s transition to zero emission vehicles.
He added: “The mandate is designed to give a clear direction of travel and we’ve seen the market evolve significantly since it was introduced.
“Any review needs to be grounded in evidence and the experience of those delivering the transition every day.
“Volatile used vehicle values, uneven demand across different vehicle types, infrastructure gaps and growing compliance costs all influence the pace at which businesses and motorists can make the switch with confidence.
“We will continue to provide evidence-led recommendations that support investment, strengthen consumer confidence and help ensure the UK’s transition remains both ambitious and deliverable,” he added.
With the right balance of realism and enablers, vehicle manufacturers can continue investing, operators can switch to EVs with confidence, and the UK can build sustainable electric van growth on a more secure footing.
It is timely, therefore, that the government has brought forward its review of the regulation, providing an opportunity to set realistic targets aligned with the market and manufacturing realities the sector faces.
