Is the ZEV mandate review being brought forward?

European Comission decision causes more uncertainty across Europe

Hello, I’m Tom Riley, and welcome back to The Fast Charge, a British EV newsletter.

The top story this week... Following the European Commission's decision to make significant changes to its automotive climate commitments, the UK government confirms a ZEV mandate will occur but it’s not being brought forward. Summary and analysis below.

Elsewhere... Moto is launching its own charging network, HMRC updates mileage reimbursement rates, and another Chinese EV is coming to the UK.

As ever, if you have any comments or feedback, please reply to this email or message me on LinkedIn.

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Is the UK reviewing the ZEV mandate early in response to EU changes?

Summary: The European Commission, which oversees the EU (the group of European countries we left in 2020), has announced significant changes to how its version of the Zero Emission Vehicle mandate will operate going forward. It follows considerable industry pressure, especially from big automotive producers like Germany, to push back their plan to end new petrol and diesel car sales by 2035. As a result, a UK government minister this morning suggested to the Financial Times it will bring a review of the ZEV mandate forward to 2026.

After a great many hours of confusion, the government finally published a statement rebuking this. A Government spokesperson said:

“We have not brought forward the ZEV Mandate review. As previously committed, we will publish the review in early 2027 which means preparatory work will begin next year so stakeholders can be properly engaged.”

What are the EU doing? The EU’s new plan will see its hard ban removed. Under the new proposal, only 90% of new cars sold from 2035 have to be zero-emission, rather than 100%. The remaining 10% can be made up by other fuel types. Lucien Mathieu, from Transport & Environment, has posted a good explainer as to how it will work in reality. In short, as the percentages relate to CO2 emissions, carmakers effectively now have a 10% CO2 allowance to either sell a lot of efficient plug-in hybrids. Or use it to sell just a handful of pure smoke-in-the-face combustion cars. It’s been provided to give carmakers a bit of flex, though the majority of sales will still need to be fully electric.

As you can imagine... The reaction amongst EV industry leaders in the UK about the prospect of another ZEV mandate review is one which, I believe, Zelda Fitzgerald’s character put quite well in the film ‘Midnight in Paris’, commenting that Owen Wilson looked: “Stunned. Stupefied. Anesthetized. Lobotomized.” Those feel like good words to describe many people’s feelings. Maybe others to add would be ‘anger’ and ‘anxiety’ at the obvious threat to existing investment, which up until this point had been getting a lot steadier in the UK.

Vicky Read, CEO of the trade body ChargeUK, reacted by saying:

“This adjustment does not change the fact that the transition to EVs is happening. The sale of almost all petrol and diesel cars will cease across the EU by 2035 if not before. Any thought of reopening discussion about the UK’s own ZEV mandate, which already contains flexibilities to support car manufacturers, would be a major over reaction putting billions of investment in charging at risk and undermining driver confidence.”

Elsewhere… Tanya Sinclair, CEO of Electric Vehicles UK, commented:

“Set aside the wider economic debate on Brexit, and this point is simple: the UK gained the ability to set clear, forward-looking electrification targets for manufacturers. Walking back from that ambition now, in step with parts of Europe, would mean squandering that advantage and weakening the UK’s position in a global transition that is moving, not slowing.”

Carmakers have had mixed reactions. Volkswagen, once the leading European carmaker on EVs, has welcomed the changes, saying it is “economically sound”. Meanwhile, Volvo, which though European in origin, is now owned by Chinese carmaker Geely, has criticised the changes. Certainly, these changes are likely not going to help the already struggling Polestar (one of Geely’s EV brands) from going under.

As far as I’m aware... As of Wednesday morning, the Society of Motor Manufacturers and Traders has yet to make a public comment. However, back in July, readers may remember that at a SMMT conference, Chief Executive Mike Hawes suggested that, if incentives were not forthcoming, they would want to look at a ‘fundamental’ review of the ZEV mandate. Obviously, since this date, there’s been a raft of incentives launched, including the new taxpayer-funded car grant and more charge point investment.

What are the implications for the UK? As above, a review of the ZEV mandate was always going to happen in 2027. It’s such a vast bit of legislation, it would be daft of anyone to suggest it’s set in stone. However, the concern is that, by bringing that review forward, the UK government will end up aligning more closely with the EU. Thus far, Downing Street has said it remains committed to ending the sale of new combustion vehicles by 2030 (aka, the existing policy). EU turn if you want to; the UK is not for turning.

But Riley here is a sceptic. This government is not in a strong place, and it is clearly under threat by those inside and outside the Labour Party. These changes also arrive as Starmer continues to strengthen the UK's relationship with the EU and its member states. He will not want to go too far out of alignment with them, or be seen by other nations, like the US, to be allowing Chinese imports to surge across British roads.