The UK Government has unveiled a revised Zero Emission Vehicle (ZEV) mandate, confirming that hybrid cars and vans will continue to be sold until 2035 and offering new flexibilities for manufacturers. The update follows a Department for Transport (DfT) consultation that closed in February 2025 and is aimed at balancing decarbonisation goals with industry needs.
Petrol and Diesel Ban Still Set for 2030
The core commitment remains: the sale of new petrol and diesel-only cars will be banned from 2030. However, under the revised rules, full hybrids (HEVs) and plug-in hybrids (PHEVs) will be allowed until 2035. This extension provides a longer runway for both manufacturers and consumers to transition to zero-emission vehicles.
The rules also apply to light commercial vehicles, meaning petrol, diesel, and hybrid vans will also remain on sale until 2035.
Flexibility for Manufacturers
The updated ZEV mandate introduces a range of flexibilities to help manufacturers meet annual electric vehicle (EV) sales targets:
- Credit trading between cars and vans: Manufacturers can now offset shortfalls in car or van EV sales using credits from the other category. One car credit will count for 0.4 van credits, while one van credit equals two car credits.
- Extended CO2 credit transfers: Carmakers can continue to earn ZEV credits by reducing CO2 emissions in their non-electric fleet, with the scheme now extended from 2026 to 2029.
- Credit borrowing: Companies can “borrow” credits from future years to remain compliant in the short term, though this remains capped.
Additionally, plug-in hybrid electric vehicles (PHEVs) will continue to be assessed using existing CO2 test values rather than the newer, stricter Euro 6e-bis results now adopted in the EU. This decision is intended to simplify compliance and support manufacturers heavily invested in PHEV models.
Sales Targets and Reduced Fines
Manufacturers still need to hit annual EV sales targets, with 28% of new car sales required to be zero-emission in 2025 (up from 22% in 2024). For vans, the target increases from 10% to 16%.
To reduce financial pressure, non-compliance fines have been cut:
- Cars: £15,000 → £12,000
- Vans: £18,000 → £15,000
The Government expects very few manufacturers to face penalties under the revised rules.
Exemptions for Smaller Brands
Small and micro-volume manufacturers—such as niche and luxury brands like Aston Martin and McLaren—will be exempt from the mandate requirements altogether. Instead, small-volume manufacturers will work with the DfT to agree on modest fleet-wide CO2 reductions post-2030.
No New EV Incentives
While the ZEV mandate changes support manufacturers, the update did not include any new incentives to stimulate retail demand for EVs or boost the used electric vehicle market.
Industry voices, including the Society of Motor Manufacturers and Traders (SMMT) and the AA, have warned that without fiscal support for consumers, EV adoption may stall.
Industry Response
Transport Secretary Heidi Alexander said the reforms are designed to “deliver clarity, ambition and leadership” while supporting jobs and keeping the UK’s 2030 target intact.
SMMT CEO Mike Hawes welcomed the Government’s responsiveness but stressed the need for consumer incentives to drive EV adoption amid economic and geopolitical uncertainty.
AA President Edmund King also called the move a “pragmatic step forward” and emphasized that hybrids could play a critical role in the transition to fully electric vehicles.
Looking Ahead
The Government plans to publish a new industrial strategy this spring to further support the UK automotive sector. As international trade pressures, including a looming 25% tariff on UK car exports to the US, begin to bite, industry leaders are calling for a bold, coordinated approach to keep Britain competitive.