ZEV mandate isn’t being missed – it’s just misunderstood, says The Car Expert

Following the latest July UK new car registration figures from the Society of Motor Manufacturers and Traders (SMMT), Stuart Masson, Editorial Director of The Car Expert, claims the latest figures show manufacturers are broadly on track to meet their real-world Zero Emission Vehicle (ZEV) targets…

“Every month, the publication of the latest UK new car registration figures is followed by the same familiar narrative: that electric vehicle demand isn’t keeping pace with the UK’s Zero Emission Vehicle (ZEV) mandate. It’s becoming an increasingly tired argument because it ignores how the legislation actually works.

“The SMMT continues to highlight this year’s headline 33% EV target and suggests the industry remains “well short” of it. But that’s not the figure manufacturers are actually working towards. The mandate includes allowances and flexibilities that were deliberately built into the legislation, meaning each manufacturer’s effective target is lower depending on its individual circumstances.

“They’re not loopholes – they’re part of the system. It’s no different to income tax. You might officially pay tax at 20% or 40%, but personal allowances and reliefs reduce what you actually pay. Nobody would argue those allowances somehow don’t count. The ZEV mandate works in exactly the same way.

Effective target is closer to 25%

“In practical terms, the effective target for many manufacturers this year is closer to 25%, although it varies by brand. Coincidentally, battery electric vehicles currently account for around 25% of year-to-date registrations, suggesting the industry is broadly where it expected to be.

“That changes the narrative entirely. Rather than being ‘well behind target’, manufacturers appear to be broadly on course to meet the compliance requirements that actually apply to them.

“It also explains why EV market share has settled around the mid-twenties. If a manufacturer is already comfortably on track to meet its obligation, there’s little commercial sense in continuing to chase additional EV registrations if it means sacrificing profitability. Unless those extra sales can be carried forward into future compliance years, it often makes more financial sense to protect margins and prepare for the higher targets that arrive in January.

“Seen in that context, today’s market share shouldn’t automatically be interpreted as evidence of weak consumer demand. In many respects, it’s evidence that the mandate is operating exactly as it was designed.

“The registration figures themselves also paint a far more encouraging picture than some of the accompanying commentary suggests. Battery electric vehicle registrations increased by around 45% compared with July last year, while plug-in hybrids were up more than 30%. Petrol and diesel continued their long-term decline.

“Some will argue that 45% growth only looks impressive because July last year was comparatively weak, but that ignores the wider trend. EV registrations still increased in July 2025 compared with 2024, which increased on 2023, which increased on 2022. Looking across several years rather than focusing on a single monthly comparison shows a market that continues to grow steadily.

“Perhaps the more interesting story within today’s figures isn’t the ZEV mandate at all – it’s how rapidly the UK marketplace is being reshaped. Overall registrations were up around 12% in July, which is undoubtedly positive.

Chinese brands dominate

“However, much of that growth came from Chinese manufacturers. Strip those gains out and much of the rest of the market effectively went backwards. That’s a trend we’ve seen throughout 2026 and one that’s becoming increasingly difficult to ignore.

“Brands such as Geely and Leapmotor are now outselling several long-established manufacturers, while BYD and Chery Group continue taking meaningful share from major European, Japanese and American competitors. The competitive landscape is changing in real time.

“That’s the challenge many legacy manufacturers should be concentrating on. Weakening the ZEV mandate won’t suddenly persuade customers to buy products they’ve already chosen to ignore. The market is becoming more competitive, consumers have more choice than ever before, and manufacturers ultimately need products that people genuinely want to buy.

Growth of plug-in hybrids

“It’s also worth noting that plug-in hybrids once again outsold basic (non-plugged) hybrids. That’s the third time in the last four months, and increasingly looks like a genuine market shift rather than a one-off result.

“If government decides the mandate needs further refinement, there may be a stronger case for placing greater emphasis on plug-in hybrids rather than simply reducing EV ambitions. Given that ministers have already extended the lifespan of conventional hybrids beyond 2030, the continued growth of plug-in hybrids suggests they have an increasingly important role to play in the transition.

“Ultimately, the UK’s shift towards electrification continues to move in the right direction. Demand is growing, manufacturers appear broadly on track to meet the compliance targets that actually matter, and consumers continue to embrace electrified vehicles in increasing numbers. Rather than diluting the policy, the focus should now be on supporting that momentum and ensuring the UK remains competitive in an increasingly global automotive market.”

For more information, visit: thecarexpert.co.uk

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