UK carmakers near EV sales targets despite government weakening rules after industry pressure

UK carmakers are on course to meet this year’s electric vehicle (EV) sales targets, despite having successfully lobbied the government to soften the rules.

In the first half of 2025, EVs accounted for 21.6% of new car sales, according to analysis from thinktank New AutoMotive. This puts the industry only marginally below the adjusted target of 22.06% once official “flexibilities” are factored in – such as borrowing credits from future years and earning partial credit from selling hybrids.

The data undercuts the industry’s argument that the zero-emission vehicle (ZEV) mandate introduced by the previous Conservative government was too strict. That policy, which required carmakers to increase the share of electric vehicles sold each year or face fines of up to £15,000 per car, faced intense lobbying from automotive leaders.

In April, new business secretary Jonathan Reynolds confirmed that Labour would ease the requirements. The changes include more generous flexibilities and reduced penalties. Carmakers argued the rules were unworkable and even blamed factory closures – including Stellantis’s decision to shut its Luton van plant – on the ZEV mandate. However, earlier statements by company executives cast doubt on that rationale.

Ben Nelmes, CEO of New AutoMotive, said: “Carmakers are within touching distance of their targets for 2025 before taking into account the government’s decision to weaken the targets. This impressive progress should reassure ministers that ambitious targets spur the innovation and dynamism the UK needs to achieve net zero and get ahead in the global shift towards electric vehicles.”

The government’s rollback is expected to result in increased carbon emissions, despite its claims the environmental impact will be negligible.

New AutoMotive’s analysis shows that Japanese manufacturers are lagging furthest behind. Nissan, for instance, is waiting for its Sunderland plant to begin production of the next-generation Leaf. Toyota and JLR (Jaguar Land Rover) are also behind their effective targets.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said the market is moving forward – with one in four new car buyers choosing an EV in June – but not quickly enough. He pointed out that fleet buyers account for most of the EV demand due to tax incentives, while just 13% of private buyers have opted for electric this year.

“The lack of natural demand among private consumers has forced manufacturers into unsustainable discounting,” Hawes said. “To meet targets, they are being hit with the double whammy of offering heavy incentives while facing punitive fines.”

Consumer reluctance to go electric stems from the high upfront cost of EVs and patchy charging infrastructure. Hawes called on the government to follow international examples and reinstate direct purchase incentives for consumers – which, he said, had once helped the UK become a world leader in the transition to zero-emission vehicles.

Despite the progress, campaigners argue the decision to loosen targets sends the wrong message. They warn it may slow the pace of innovation and undermine the government’s net zero ambitions at a crucial time.

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UK carmakers near EV sales targets despite government weakening rules after industry pressure