Toyota warns it could cut UK sales unless the ZEV mandate is eased

Toyota has warned that it could cut the number of cars it sells in the UK unless the government eases the zero-emission vehicle (ZEV) mandate. In an interview with The Telegraph published on 17 October 2026, Toyota Motor Europe called the rules “not sustainable”, asked for the 2030 target to be cut from 80% to 50% and declined to guarantee the future of its Burnaston car plant in Derbyshire. For drivers, the row matters because the mandate is the main reason car makers have been discounting electric cars so heavily this year.

The intervention lands while ministers are midway through a review of the mandate. Stellantis, which owns Vauxhall, Renault and Nissan have all made similar complaints, and all three also run UK plants. Against them, more than 30 transport, climate and health groups have urged the government to leave the targets alone. If you are thinking about buying or leasing a car in the next year, the outcome will shape how much you pay. Our explainer on the ZEV mandate review sets out the options on the table.

What exactly did Toyota say?

Toyota said the mandate pushes sales faster than buyers want and that, without change, it may have to sell fewer cars in Britain. Matt Harrison, chief corporate officer of Toyota Motor Europe, told The Telegraph the company can absorb the cost “for a period of time” but not indefinitely.

“So the big question is: are you going to get regulatory flexibility?” he said. “If that’s going to happen in the short term, then of course you can cope. If it isn’t, then you have to look at more significant actions. That might mean rethinking what sort of volume [of cars you sell]. Certainly, nobody’s interested in selling cars at a loss for a considerable period of time.”

He went further on the long-term goal. Harrison called for the 2030 target to fall to 50% and for the 2035 end date for new combustion cars to be dropped altogether.

Two days later Toyota put out a more measured written statement, reported by Motor Trader. It welcomed the review and said the move to zero emissions “must stay on track, but at a pace that reflects real customer demand”. Its formal asks were:

• A maximum zero-emission share of 50% for cars and 40% for vans in 2030, with flexibilities.
• A framework for 2035 agreed now, so the industry has long-term direction.
• Practical compliance options kept, with the flexibilities extended to 2035.
• Closer alignment with the EU through a five-year approach to targets.

“With 2030 only three years away, investment decisions taken now will shape production to 2035 and beyond,” Toyota said. “Manufacturers and suppliers need a clear, realistic framework to invest with confidence.”

What is the ZEV mandate and what does it require?

The ZEV mandate is the UK law that requires each car maker to make a rising share of its new car sales zero-emission, which in practice means fully electric. The share climbs each year and reaches 80% of new cars in 2030 and 100% in 2035. Car makers that fall short must buy credits from rivals that over-achieve, or pay a fine for each car they miss by.

There are flexibilities. Firms can borrow credits against future years, earn credits for cutting average CO2 from the petrol and hybrid cars they still sell, and trade credits with other brands. That last option is the one Toyota objects to most loudly. Harrison said the rules encourage “disruptive behaviour in the market”, including Western brands buying emissions credits from Chinese rivals, heavy discounting and pushing sales through the Motability scheme, which provides cars to people on disability benefits.

Our guide to what the ZEV mandate means for car buyers explains the credit system in more detail, and our piece on the petrol and diesel ban explains what 2030 and 2035 mean for cars already on the road. In short: nothing in the mandate stops you buying a used petrol car, or keeping and driving the one you own.

Where is the government’s review heading?

No decision has been published, but the direction of travel is towards a lower 2030 target. The Telegraph reported that the government had been considering cutting the 2030 figure from 80% to 50% and is now said to be considering 60%, with the 2035 target left at 100%. Fleet News also reported that ministers were leaning towards 60% in the week of 19 October.

Option	2030 share of new cars	2035	Who is asking for it
Current law	80%	100%	Climate, health and transport groups; charging firms
Reported government thinking	60%	100%	Ministers, according to reports in October 2026
Earlier review option	50%	100%	Reported as under consideration before October
Toyota’s position	50% cars, 40% vans	Wants the end date reconsidered	Toyota Motor Europe

Toyota is not happy with the 60% compromise either, mainly because it leaves 2035 untouched. “The lack of addressing 2035 is not ideal,” Harrison said. “Let’s say 50% is accepted for 2030, but then 100% is kept in 2035. We just shove the problem to 2035. And if we’re trying to make an investment decision, we don’t really have as much clarity as we’d like.”

Why is Toyota worried about Burnaston?

Toyota’s Burnaston plant near Derby builds the Corolla hatchback, and Toyota would not guarantee its future. Yoshihiro Nakata, president and chief executive of Toyota Motor Europe, said Burnaston and the company’s engine plant at Deeside in north Wales face growing problems with competitiveness.

“One [problem] is that energy costs are higher than in other countries, or labour costs are relatively higher, and also the supply chain is being gradually deteriorated,” he said. “The actual skill level [of workers] is very good. But some of these areas, we would like to discuss with the UK Government.”

Neither executive said the plants were at risk, but both pointed to investment decisions coming up soon on whether to build new models in Britain. That is the real pressure point. A factory that does not win a new model eventually runs out of work.

Burnaston is also heavily exposed to Europe. About 80% of the cars it builds are sold across the Channel, according to The Telegraph. That is why Toyota cares as much about the EU’s planned “Made in Europe” rules as about the UK mandate. The EU scheme would steer subsidies and tax breaks to cars built inside the bloc, and friendly countries such as the UK, Japan and Turkey are currently set to be left out. A deal struck by France and Germany in mid-October suggested Britain could join, but only if it puts tariffs on Chinese cars, as we cover in our report on the UK and Made in Europe.

“Isolation makes us weaker,” Harrison said in Toyota’s statement. “‘Made with Europe’ is our central request, because together, we are stronger.” Nakata added: “Toyota is not a guest in Europe. We are a European manufacturer.”

Who disagrees with Toyota?

A large coalition of transport, health and climate groups wants the mandate left exactly as it is. Its open letter, reported by Fleet News on 22 October, was signed by more than 30 organisations, including New AutoMotive, the Campaign for Better Transport, Greenpeace UK, Friends of the Earth, WWF-UK, Green Alliance, Mums for Lungs, Cycling UK, the National Pensioners Convention, the think tank E3G, the energy analysts Ember and T&E UK. The Climate Coalition, Stop Climate Chaos Scotland and Climate Cymru, which together represent hundreds of member groups, also signed.

“We are profoundly disappointed that the Government is considering weakening the ZEV mandate,” the signatories wrote. “The mandate is not only Britain’s biggest carbon-reduction policy of this decade, but it is also one of the strongest economic, energy security and air pollution policies the UK currently has.”

They argue that weakening it would be “a totally unnecessary act of economic self-harm” that risks slowing investment in industries such as lithium mining and refining. Charging companies make a related point: they have built networks on the assumption that EV numbers rise in line with the law, and a lower target means fewer customers for those chargers in the early 2030s.

What does this mean for car prices and discounts?

The mandate is the reason electric cars have been discounted so heavily, so a weaker target is likely to mean smaller discounts. Toyota itself made the link when it complained that the rules push firms into “heavily discounting cars”. Brands that are behind their quota have every reason to cut EV prices, offer cheap finance or register cars to their own dealers before the year ends. Our analysis of the ZEV mandate gap and fourth-quarter EV discounts shows how that pressure builds as December approaches.

If the 2030 target falls to 60% or 50%, the annual steps in between are also likely to be softened. That would take some of the urgency out of year-end deals. It would not end discounting altogether, because the market has changed in other ways:

• New competition. Chinese brands now take more than a fifth of UK new car sales and are pricing aggressively, which keeps pressure on everyone else.
• The Electric Car Grant. Eligible EVs get up to £3,750 off, which supports prices for qualifying models regardless of the mandate.
• Running costs. With pump prices high, the cost gap between charging at home and filling up is large, which supports demand on its own.

For buyers, the practical advice is simple. If you were planning to buy or lease an EV in the next few months, current deals reflect a market where car makers are under maximum pressure. That pressure may ease once the review is settled. If you are not ready to switch, nothing in the review forces you to, and petrol and hybrid cars will stay on sale beyond 2030 under every option being discussed.

What does it mean for Toyota buyers?

For anyone buying a Toyota now, there is no immediate change. The brand still sells its hybrids, plug-in hybrids and electric models such as the bZ4X in the UK, and its warranty and servicing networks are unaffected by the review. The threat is about future volume and future investment, not about cars already on forecourts.

Toyota’s position does tell you something about its product plans, though. A company asking for a 50% target is signalling that it expects to sell a lot of hybrids well into the 2030s. If you prefer a self-charging hybrid to a full EV, that is good news. If you want a wide choice of Toyota EVs, the brand is telling you it will add them at the pace it thinks buyers want, not the pace the current law demands.

What happens next?

The government’s review is still under way and no date has been set for its conclusions. Several things will shape the result:

1. The Autumn Budget. Industry groups are asking for EV incentives such as lower VAT on public charging, and any new support would make it easier for ministers to keep a higher target.
2. The EU deal. If the UK wants to join Made in Europe, Renault’s chief executive François Provost has said it will need to align on China tariffs and adjust the mandate. We cover his comments in our report on Renault’s call for a reset.
3. Investment decisions. Toyota, Nissan, Stellantis and others are deciding which models to build where. Ministers know that what they decide on the mandate will feed into those choices.

Whatever the outcome, the 2030 end of sales for new petrol and diesel-only cars, with hybrids allowed until 2035, is a separate commitment that the government says it is keeping. The fight is about how fast the shift happens, not whether it happens.