What is the ZEV mandate?

You’d have to have been living under a rock for the last half a decade to have avoided getting wind of the 2035 combustion vehicle ban. 

Or indeed our government’s aim to be net zero by 2050.

And while it would have been a good five years to have taken rock-based-refuge for many reasons, we all must face the music at some point.

Currently, those tunes are increasingly and unashamedly electronic in nature.

So, whether you consider yourself an expert, or you’re a freshly emerged and bright-eyed newbie ready to understand the state of things (or are just a bemused Daft Punk fan wondering why you’re reading about electric cars), join us as we venture on a journey of electrification. 

And, importantly, decipher what the ZEV mandate means if you’re looking for a new car lease.

You can watch Carparison's Operations Director summarise the points of this article below.

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What is the ZEV mandate?

The zero-emission vehicle (ZEV) mandate is a definite deadline for the end of new combustion vehicle production and sale in the UK.

Although the original deadline was 2030, the Conservative Government pushed it back to 2035 (and it may yet return to 2030 under the new Labour Government).

At that point, it will be a legal requirement for 100% of new vehicles sold to produce no tailpipe emissions.

As things stand, 2030 still isn’t off the hook: this interim deadline has been set so that 80% of new cars and 70% of new vans produce zero emissions when on the road by the chime of Big Ben’s New Year’s bells six years from now.

The changing deadline put the UK on a par with other global economies, and great car makers, including Germany (think Mercedes and BMW), France (think Citroen and Peugeot), and Sweden (think Volvo and Polestar).

We were told this extra time would allow for greater consumer choice, better EV offerings and an improved and more-robust charging infrastructure.

Why care about the ZEV Mandate now?

If you have children, parent small furry rodents, have a fixed-rate mortgage, or took out a warranty package on your new boiler, you’ll know how fast five years comes around.

And there’s a fair old mountain to climb in that time.

And we’re not talking Yr Wyddfa (Snowdon) on a lovely, quiet summers day.

We’re talking Everest during a blizzard.

Data from the Society of Motor Manufacturers and Traders (SMMT) at the time of writing (Sept 2024) shows that battery electric vehicles (BEV) currently only represent 17% of total new registrations in 2024.

While that is marginally up on 2023 (16%), it is a gulf away from the 80% 2030 target.

But the Government and car makers alike are donning their hardiest hiking gear and starting their ascent.

To do that? Enter the strict annual targets for the percentage of EV sales manufacturers must achieve out of their total haul, effective from January 2024.

The ZEV mandate in 2024

To support the deadlines issued under the ZEV mandate, yearly targets have been issued to car manufacturers to support a gradual increase in EV uptake rather than it hitting us in one, almighty lump.

These targets gradually increase the percentage of vehicle sales that must be zero emissions cars over the coming years.

The climb looks as follows:

• 2024 – 22%
• 2025 – 28%
• 2026 – 33%
• 2027 – 38%
• 2028 – 52%
• 2029 – 66%
• 2030 – 80%

Failure is costly and will result in fines of £15,000 for each of the non zero emissions cars produced over the given target.

Jumping back to our friends at the SMMT, looking at August in isolation you’d be forgiven for thinking this was a doddle. During the month, the industry as a whole beat the 22% target for the first time, and green transport groups heralded this achievement as an important milestone.

But while a cumulative total is helpful, each manufacturer is judged in isolation and a fine, if applicable, will be tallied as such (excluding a minor get out clause we'll get onto).

Hopefully it’s a sign of good things to come. But there is a huge deficit that some manufacturers have a very limited time to rectify.

Their walking boots are rubbing and their trekking pole snapped a mile in.

ZEV winners and losers

As with any race, there are winners and losers.

We’ll start by looking at the front runners who are riding high, are fully embracing the move to EV and are currently smashing those targets.

And avoiding those fines.

Reassuringly, there are some great new cars joining the fray and making new electric car perusing a place of plentiful choice.

We’ll then move onto the less lucky of the lot. 

Those who need to shift EVs in volume over the next few months or carry the weight of substantial penalties.

What the ZEV mandate means for car buyers

Ok, so what about us car buyers?

While the heft of the struggle lands firmly on the door of manufacturers, those in the market for a new car have extra considerations to make. 

The costly repercussions of the ZEV mandate will undoubtedly impact the availability or price of combustion cars irrespective of public demand. Manufacturers will likely withhold or raise the price on combustion models as they seek to control their figures.

Not good if you’re set on a petrol or diesel number.

On the other hand, it becomes a great time to get behind the wheel of an EV.

With supply far outweighing demand, plus the pressure to shift more electric-powered-metal than ever before, the price of electric cars will only come down. And this could be quite extreme for those looking to dodge the ZEV mandate fines.

With leasing removing the risks of depreciation, resale and the FOMO caused by fast evolving technological progression, it’s a funding method that's growing in popularity among UK drivers.

The brands beating the ZEV mandate

It’s no surprise that the manufacturers peddling only pure electric cars are on the right side of the ZEV mandate.

It would literally be impossible for them to be anything but.

Although what may surprise you is just how few there are.

Tesla, BYD and Great Wall (yes, that's it!) are all sitting pretty with 100% EV percentiles.

Where is Polestar? We hear you cry.

Despite Polestar’s lineup consisting of pure EVs, they are grouped with Volvo under the Geely banner. Nevertheless, they're still comfortably above the 22% target at 37%.

It’s not only EV purists that are doing well – BMW (26%), Mercedes (24%) and SAIC (24%) –  which includes the likes of MG -  are also on course to surpass the ZEV target.

Brands behind the ZEV target

Despite the sizeable punishment before them, there are some providers that are failing to keep pace.

And as volume brands, the fine-worthy combustion cars are mounting up.

Including, but not limited to, these three big names.

Volkswagen

Starting with VW, who are well ahead as the biggest selling brand so far this year. But they also expect to shoulder the biggest EV deficit. 

Despite creating the highly praised ID range, including the ID.3, the ID.4 and the ID.5, Volkswagen’s EV sales have paled in comparison to their combustion counterparts.

This is where the popularity of the VW Golf and their wide array of acclaimed SUVs including the Tiguan and T-Roc are more a hindrance than a help.

A nice problem to have until that ZEV invoice drops on the doormat.

Volkswagen are expected to have a late surge thanks to the release of the impressive ID.7 Tourer and ID.7 Saloon this summer, which complete their extensive range of EV body styles. With the MPV ID. Buzz, there isn’t a shape that Volkswagen don’t offer in EV form.

But away from fangirling, there's a lot for them to do to avoid ZEV mandate fines as they currently sit at just 13% of the 22% they need to be fine free.

With their sights on shifting more EVs over the coming months, now is a great time to grab an EV Volkswagen lease.

Ford 

Ford have been relatively late to the EV party, introducing both of their electric cars – the Ford Explorer and the Ford Capri – only very recently.

They’ve not had much time to level out the combustion car sales of the year so far, and that is visible in the figures. Currently only 7.6% of Ford’s 2024 sales are electric.

Ford are having a bad year for sales generally. It follows the cessation of a number of their leading cars over the last few years – the Fiesta, Mondeo and Ka among them – a demise of which the Focus is due to follow suit soon.

While a smaller total sales volume is no surprise as Ford has lost some of its most popular cars, it does leave less work to do to eek up that EV percentage. 

Will it mark a bold move from the brand into a new era of models, or will it join a coveted list of car manufacturers who did not endure the test of time? 

One thing's for sure: we’re cheering them on from the sidelines.

Nissan

Home to one of the longest-standing and most widely popular electric cars, the Nissan Leaf, Nissan’s EV credentials set them in good stead to be well clear of the ZEV mandate police.

However, the popularity of their combustion range, including the Nissan Qashqai and Nissan Juke, makes that a tall order.

Contrary to Ford, Nissan’s sales volume is up 22% year on year. Of this growing total, their EV percentage sits respectably at 16%.

Although this is admirable for a volume brand, it still leaves them liable. 

Despite their early lead with the Leaf, Nissan’s EV offering is sparce. With the Nissan Ariya alone completing the set. 

So, despite leading the charge on mainstream EV uptake, two models holding their own against a growing number of the UK’s best sellers was always going to be an uphill struggle.

As they rally their EV totals in the coming months, it’ll be a great time to consider an electric Nissan lease.

ZEV mandate credits

But all is not lost.

The sun is peaking through the ZEV mandate mist and the peak is in sight for the likes of Renault, Volkswagen and Ford, all in the form of ZEV credits.

Awarded or stripped according to their performance, manufacturers can either bank these credits for future years or sell them, presumably at a premium, to underperforming brands.

Or between brands under wider umbrellas.

These credits could take manufacturers over the target and therefore allow them to bypass any penalties.

And that’s not all.

Separately set CO2 targets, which are individual to each brand, can be achieved through selling more low-emission cars like hybrids.

Beating this CO2 target earns some form of quantifiable brownie point to be converted into ZEV credits for the first three years.

So pure BEV sales are not the only way to adhere to the ZEV mandate.

The emergency survival kit of this hike, if you will.

Summary

The biggest victor of the ZEV mandate, and the main reason we should care so much, is the increased evolution towards tailpipe emission free mobility and the longevity and beauty of this place we call home.

Manufacturers prioritising their EV offering and maximising the value provided to car buyers in an increasingly crowded market continue to flourish. 

Those falling behind in their EV offering need to dust themselves off and regroup. They’ve chosen the more challenging adventurers trail but ultimately the destination is the same.

The summit is 2035 and 100% of new car sales being fully electric.

It remains to be seen whether the end products from lagging brands will be all the better for this extra personality building.

But one thing’s for sure: it’s a great time to get behind the wheel of an electric car lease.