“One of the most remarkable interventions in any industry ever” is how Mike Hawes, chief of the Society of Motor Manufacturers and Traders, described the zero-emission vehicle (ZEV) mandate that the UK government introduced into the country’s new car market at the start of this year.
However dry and dull the ZEV mandate might sound, it’s a serious business that has caused car makers to build up entirely new teams of data analysts to manage compliance spreadsheets. And all this was only rubber-stamped towards the end of last year with just a few weeks’ notice.
Hawes’ description of the legislation, which creates a fine of £15,000 per non-compliant car sold over the limit, is a good temperature check for something that impacts and influences every single car sold in the UK and will continue to do so until at least the end of the decade.
What is the ZEV (zero-emission vehicle) mandate?
Sitting comfortably? You might not be if you work for a car manufacturer, but you will want to know how it all works anyway, and it’s legislation that runs far deeper than the headline of a sliding scale of electric car sales that each car maker must hit each year, starting at 22% in 2024.
The North Star in all of this is the UK’s legislated commitment to be net zero on carbon emissions by 2050. Working backwards from that, the proposed ban (and we will get to what is still only a proposal shortly) on the sale of any new vehicle that isn’t zero-emission is set for 2035 because the average life of a car on the road is 15 years.
“As the most carbon [in our air] comes from road transport, go 15 years from 2035 to 2050 and most ‘old’ cars are off the road,” says Hawes.
For that reason, in its effort to keep the UK on track to hit its carbon-reduction targets en route to 2050, the government has focused most strongly on road transport and taken the more drastic approach of banning the sale of non-zero-emission cars, rather than simply incentivising electric cars.
It removed its incentives on the purchase of new electric cars in 2021 – although favourable BIK tax rates on EVs remain for company car users. For now there’s no VED on new EVs, but that will change for the next financial year.
The ZEV mandate sits within the wider Climate Change Act and is loosely based on California’s approach to EV adoption. A key difference, however, is that the Californian system has been tweaked multiple times in response to industry and market developments, it allows for plug-in hybrids and it’s backed by incentives.
The UK legislation requires car makers to sell an increasing proportion of zero-emission vehicles annually, starting in 2024 and hitting 80% in 2030. It defines a ZEV as having zero CO2 emissions at the tailpipe and a driving range of at least 100 miles on the WLTP test cycle. A battery warranty of eight years or 100,000 miles must be provided (so don’t fall for any manufacturers advertising this as a perk; it’s a ZEV mandate eligibility requirement), and if the battery falls below 70% capacity in that time, a replacement must be offered.