Government launches ZEV Mandate review: What it could mean for the taxi and PHV sector facing key 2030 and 2035 vehicle transitions

The Government has launched a major review of the Zero Emission Vehicle (ZEV) Mandate that could alter the pace at which manufacturers must increase electric vehicle sales, with potentially significant consequences for taxi and private hire vehicle (PHV) operators planning vehicle replacements over the next decade.

Vehicle manufacturers, suppliers, charge point operators, dealers, consumers and communities are being asked to respond to the consultation, which opened on Friday 14 August and runs until 23 October.

The Government says the final destination remains unchanged: new petrol and diesel cars will be phased out in 2030 and all new cars and vans must be fully zero emission by 2035.

What could change is the trajectory between now and those deadlines.

Under the current mandate, manufacturers have targets of 33% zero-emission sales for cars and 24% for vans in 2026, rising to 80% and 70% respectively by 2030. The consultation will consider alternative trajectories and whether existing compliance flexibilities should continue for longer.

For cars, ministers are seeking views on maintaining the existing 80% ZEV target for 2030 or reducing it to 70%, 60% or 50%. Another option would retain the 80% target while extending manufacturer flexibilities until 2034. For vans, the existing 70% target could remain or be reduced to 60%, 50% or 40%.

Both taxi and PHV sectors are major users of new and nearly-new vehicles, with cabbies typically placing considerably greater mileage and working demands on vehicles than private motorists. Changes to manufacturer targets could influence the number, range and pricing of electric models entering the market, while also affecting the supply of petrol, hybrid and plug-in hybrid vehicles during the transition.

Transport Secretary Heidi Alexander said: “The UK EV market is strong - sales are up, British manufacturers and charge point operators are investing billions, alongside our backing of £7.5bn, including our Electric Car Grant that has helped over 160,000 people make the switch.

“It’s right we keep targets under review to ensure they’re practical and back British industry. The end goal hasn’t changed – but we need to take business with us on the journey, and that’s exactly what we’re doing today, by making sure industry has the chance to shape how we get there.”

The review comes as electric car registrations continue to increase. According to the Government, more than one in four new cars sold are now electric, with EV sales in July 45% higher than during the same month last year. More than two million electric vehicles are now registered on UK roads.

Get FREE WhatsApp news updates here

Ministers also say the Electric Car Grant, offering up to £3,750 towards qualifying new EVs, has supported more than 160,000 purchases since its introduction last July. The Government claims motorists able to charge at home can save around £1,400 annually in running costs, although the economics for professional drivers can differ substantially because of higher mileage, charging requirements, vehicle financing and time spent away from revenue-generating work.

For taxi and PHV drivers, purchase price is only one part of the transition. Access to dependable and competitively priced charging is particularly important for drivers covering high daily mileages. Drivers without off-street parking can be considerably more dependent on the public charging network, making charger availability and electricity prices important working issues rather than simply a matter of convenience.

The Government says £600 million is being invested to expand charging infrastructure, building on around 120,000 charge points already available on the public network and more than one million chargers at homes and workplaces. It also points to £400 million already being used to support the delivery of more than 100,000 additional public chargers.

Plug-in hybrids are specifically included in the review. Ministers are asking how PHEVs should be treated under future legislation and whether further incentives could encourage them to operate in electric mode. That issue may attract attention from high-mileage professional drivers for whom a fully electric vehicle is not yet operationally suitable, particularly where charging access during a shift remains limited.

Any easing of interim manufacturer targets should not, however, be interpreted as the Government abandoning electrification. Ministers have explicitly retained both the 2030 petrol and diesel phase-out and the requirement for 100% zero-emission new car and van sales by 2035. The debate is instead moving towards how quickly manufacturers must increase ZEV sales before those deadlines and how much flexibility they should receive along the way.

Business, Innovation, Science and Trade Secretary Jonathan Reynolds said: “The UK’s automotive sector is vital to our economy and future growth, and we’re determined to keep it that way as we get on with reindustrialising Britain to deliver good growth in every postcode.

“This consultation is about listening to industry, examining the evidence and making sure the Mandate continues supporting investment, innovation and competitiveness, so Britain’s car sector can thrive.”

The Government said manufacturers are currently on track to meet their 2025 targets, but cited supply-chain disruption, tariffs, trade uncertainty and wider global economic pressures as reasons for examining whether the existing trajectory remains appropriate.

Society of Motor Manufacturers and Traders Chief Executive Mike Hawes welcomed the review, saying: “The automotive industry is fully committed to a zero-emission future, investing billions in new technologies, products and incentives. However, with the ZEV Mandate conceived under vastly different conditions, this welcome review is a timely opportunity to adjust the transition so it works for all.

“That means a commercially sustainable transition which supports UK competitiveness, investment and jobs whilst delivering greater choice and affordability for motorists – the sooner, the better.”