The Department for Transport (DfT) has published its first-ever compliance report for the Vehicle Emissions Trading Scheme (VETS), that underpins the UK’s Zero Emission Vehicle (ZEV) mandate.

First the good news: carmakers have exceeded their EV sales targets and there were no fines issued.

In 2024, the ZEV mandate required 22 per cent of new sales to be zero emission and carmakers delivered. Indeed, they overdelivered with a near quarter of sales at 24.3 per cent. Likewise, van makers also beat the goal, reaching 11.5 per cent against a 10 per cent target.

Then the less positive: to reach ‘effective’ targets manufacturers ‘earned’ credits for low carbon vehicles, could trade credits with other manufacturers, bank excess credits for future years or borrow slightly from future targets. So, in the real-world sales were lower, at 19.8 per cent of new vehicles sold in 2024 (still impressive, however). Credits added another 4.7 percentage points.

What is true of cars is true of vans too.

Daniel Kunkel, CEO of Gridserve, commented: “Maintaining a stable and predictable policy environment will be critical to sustaining this progress. Clear signals such as the ZEV Mandate help give investors, carmakers and infrastructure providers the confidence to continue delivering.”

And now the bad news, the Society of Motor Manufacturers and Traders (SMMT) has issued a warning that current geopolitical and economic realities are likely to derail much of the upward trend, noting that battery costs are now 30 per cent more than expected, energy costs 80 per cent higher and natural demand far behind governmental ambition.

In light of these factors, the SMMT are calling for a full review of the transition to develop realistic route to decarbonisation while supporting economic growth before targets accelerate from 2027.

“The UK’s transition pathway was built on assumptions that have proved to be over-optimistic. Despite changes to regulatory flexibilities and the return of consumer incentives, the gap between policy ambition and market reality continues to widen,” The SMMT said.

Despite having the highest battery electric vehicle (EV) market share of any major European market, the UK is already falling short of its own expectations. In 2025, EVs accounted for less than the 26 per cent government originally expected would be achieved without regulation.

So far the industry has bridged the gap through discounting, more than £10bn over the past two years, and by using mandate flexibilities (see above). However, such subsidies are ‘unsustainable and undeliverable’ the SMMT say, and when at the end of 2027 the targets become significantly tougher (52 per cent for cars, 46 per cent for vans) the outlook is one of an unstoppable force meeting an immovable object.

The SMMT analysis, Same Destination, Smarter Route, details these concerns and notes that the EU, Canada and the US have all altered their origin targets.

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