A weaker ZEV mandate could cost the Treasury up to £16.7bn, industry warns

Cutting the UK’s 2030 electric car target could cost the Treasury between £2.9bn and £16.7bn in lost VAT and halve investment in new chargers, according to analysis from the energy and charging industries. The figures, from the trade body BEAMA and a ChargeUK study by consultancy LCP Delta, are being pushed hard this week as ministers are reported to be leaning towards a 60% target for 2030, down from the current 80%.

The zero-emission vehicle (ZEV) mandate sets the share of each car maker’s sales that must be electric. Car makers including Toyota say the targets are too steep. Charging firms, energy companies and a broad coalition of health and climate groups say weakening them would cost far more than it saves. This piece sets out the numbers on both sides, and what they mean if you drive, or are thinking about buying, an electric car. For the wider review, see our ZEV mandate review explainer.

What does the ZEV mandate require now?

The ZEV mandate requires a rising share of each manufacturer’s new car and van sales to be zero-emission every year. According to Fleet News, the steps so far have been:

Year	Cars	Vans
2024	22%	10%
2025	28%	16%
2026	33%	24%
2030	80%	80%
2035	100%	100%

Hybrids, including plug-in hybrids, can be sold until 2035. Car makers also get credits for cutting CO2 from the petrol and hybrid cars they still sell, which lowers the effective target. In 2024, the Department for Transport’s own compliance report showed the headline 22% target worked out at an effective floor of just 17.3% once those rewards were counted.

What is the government considering?

The government’s consultation, launched in August 2026, set out several options for 2030, as reported by edie:

• Cut the 2030 target to 50%, 60% or 70%.
• Keep 80% but with “extended flexibilities”, such as borrowing, banking and keeping the CO2 conversion credits until 2034.
• Change how plug-in hybrids count, including whether they keep their low official CO2 figures under the outgoing Euro 6 test.

The government had originally planned a mid-point review by 2027 at the latest. It brought that forward after heavy industry lobbying. In October, reports said ministers were leaning towards 60%, with the 2035 target kept at 100%.

What would a weaker mandate cost the Treasury?

BEAMA estimates that even in the best case, a weaker mandate would cost at least £2.9bn in lost VAT up to 2034. Its analysis assumed the government cuts the 2030 target to 50% and that every electric car not sold is replaced, one for one, by a hybrid. Hybrids are generally cheaper than the equivalent EVs, so each sale raises less VAT.

If the missing EV sales are not replaced car for car, because some buyers delay or buy used instead, the shortfall rises to as much as £16.7bn between 2030 and 2034.

“You don’t attract investment by moving the goalposts,” said Matt Adams, head of electrical transport systems at BEAMA. “Businesses have invested in the UK because the Government set a clear direction of travel towards electrification.”

BEAMA also linked the mandate to the planned Electric Vehicle Excise Duty (eVED), the pay-per-mile charge for EVs due from April 2028. It estimates eVED could cost the economy between £890m and £4.8bn by putting buyers off EVs. Its argument is that the two policies together send mixed signals. Our guide to pay-per-mile road tax for EVs explains how eVED is meant to work.

These are industry estimates, produced by a body whose members sell chargers and electrical equipment, so treat them as one side’s case. But they make a point that is easy to miss: EVs are not only a cost to the Treasury. They are also a source of VAT on a high-value purchase.

What would it mean for public chargers?

The charging industry says a weaker mandate would cut its investment roughly in half. In a survey of ChargeUK’s members, operators said they would reduce investment by around 50% over the next five years if the sales targets were weakened. Many charging businesses are still not profitable and are building ahead of demand, so they depend on EV numbers rising as the law currently requires.

The LCP Delta study ChargeUK commissioned estimates that the charging industry will generate £15.5bn of direct economic value between 2025 and 2035, and support:

• 71,500 direct and indirect jobs by 2035.
• £30bn of external investment.
• 9.75 million charge points across homes, workplaces and public sites.

ChargeUK says the mandate has already underpinned the roll-out of about 120,000 public chargers. “Any weakening threatens billions in charging investment and thus the wider opportunity from electrification,” said its chair, Iain Coucher. “The most extreme options in this consultation threaten to entirely upend the UK’s reindustrialisation plans.”

For drivers, slower investment would most likely show up as fewer new rapid hubs and less competition on price, rather than existing chargers closing. Our report on Connected Kerb’s new Aberdeen factory and EZO’s €150m funding for 3,000 chargers show the kind of projects that depend on demand forecasts.

What do charging firms want instead?

ChargeUK wants ministers to cut the cost of public charging rather than cut the targets. Its study says policies to lower public charging prices could unlock an extra £5.7bn of investment over five years. The measures it highlights are:

1. Equal VAT on public and home charging. Home electricity has been zero-rated since the government’s energy bill VAT cut, while public charging still carries 20%. Our piece on the public charging VAT gap explains the difference.
2. Relief from energy policy levies on electricity used for charging.
3. Lower fixed energy costs for charging operators, such as standing charges on grid connections.

EVA England, which represents EV drivers, makes a similar case. “The Government should look honestly at why EV demand has not grown as quickly as expected,” said its chief executive, Vicky Edmonds. “But the answer is not to lower the ambition of the ZEV mandate. It has to be to fix the things that are stopping drivers from making the switch.” She pointed to the “unfair premium paid by people who rely on public charging” and unreliable chargers.

These asks are now part of the lobbying for the Autumn Budget on 28 October, which we cover in our Autumn Budget 2026 EV preview.

Who wants the targets cut, and why?

Car makers and the union Unite want the targets reduced. Their case is that demand for EVs is not keeping pace with the law, so car makers either sell EVs at a loss, buy credits from rivals or sell fewer cars overall.

Unite called the system “fundamentally flawed” in June and warned that the gap between the mandate and real sales could cost UK producers around £11,000 in fines per car. “The current ZEV mandate is significantly contributing to the loss of automotive jobs in Britain,” said general secretary Sharon Graham. “The targets must be radically reduced.”

Toyota went further in October, warning it may sell fewer cars in the UK and declining to guarantee its Burnaston plant unless the 2030 target is cut to 50%. We cover that in our report on Toyota’s warning. Renault’s chief executive has called the 2030 petrol ban “stupid”, as covered in our Renault report.

Who wants the targets kept?

A broad coalition wants the mandate left at 80%. On 22 October, more than 30 organisations signed an open letter, reported by Fleet News, including New AutoMotive, the Campaign for Better Transport, Greenpeace UK, Friends of the Earth, WWF-UK, Mums for Lungs, Cycling UK and the National Pensioners Convention.

“By bowing to automotive lobbying rather than doubling down on the clean transport transition, the Government is neglecting its duty to safeguard respiratory health, reduce healthcare costs for our overburdened NHS, reduce our reliance on volatile foreign energy and protect our climate,” they wrote. “Additionally, watering down the mandate would be a totally unnecessary act of economic self-harm.”

Energy UK, which represents energy suppliers, says the switch to EVs is the single biggest driver of emissions cuts in the UK’s net zero pathway, worth more than seven million tonnes of CO2 a year.

What does it mean for you?

If the 2030 target is cut, the most direct effect on drivers is likely to be on discounts. Car makers currently cut EV prices to hit their quotas, which is a big reason electric cars have been so cheap to lease this year. A lower target means less pressure to discount. Our analysis of year-end ZEV discounts explains the mechanics.

The second effect is slower: fewer new chargers than planned, especially in areas where demand is thin. That matters most to drivers without a driveway, who rely on public charging.

The third is what happens to tax. If EVs raise less VAT than expected and eVED arrives in 2028, the Treasury will look for revenue elsewhere. That is one reason the Budget on 28 October is being watched so closely.

Whatever ministers decide, two things stay fixed for now: the end of new petrol and diesel-only car sales in 2030, and the 100% target for 2035. The review is about the pace, and the money, in between.