2025 ZEV Mandate Updates: What fleets need to know
The UK government has announced sweeping changes to the ZEV (Zero Emission Vehicle) Mandate, which requires all cars and vans on UK roads to be completely emission-free by 2035.
The announcement comes after an eight-week cross-industry consultation, chaired by the labour government to understand the implications for stakeholders across the automotive industry - from OEMs, to insurers, sales, and repairers.
Here we explore the key changes announced to the UK’s ZEV mandate in 2025, and the possible implications they could bring for fleet operators.
What is the ZEV mandate?
The UK ZEV mandate was originally introduced by the Conservative government in January 2024, and set a formal deadline for all cars & vans on UK roads to be fully-electric by 2035.
The mandate forms a key part of the UK’s ongoing effort to achieve Net Zero carbon emissions by 2050, by seeking to accelerate both production and uptake of zero emission vehicles.
At the time of its publication, the government described the mandate as ‘the most ambitious regulatory framework for the switch to electric vehicles of any country in the world’.
Read more about the ZEV mandate here
How has the ZEV mandate changed in 2025?
The UK’s labour government announced significant changes to the ZEV mandate in April 2025, following an eight-week cross-industry consultation.
The Department of Transport released a statement following the announcement of the changes, explaining their reasoning behind the updated deadlines & production targets:
“The transition to zero emission vehicles (ZEVs) will drive economic growth and make Britain a clean energy superpower, helping the UK meet its climate change obligations and improve air quality. The government is committed to phasing out new cars that rely solely on internal combustion engines from 2030.”
Here are some of the key changes introduced, and how they differ from the original mandate introduced in January 2024.
ZEV Mandate 2025 Changes:
- Pure ICE car production to end by 2030, forward from 2035
One of the most significant changes announced to the ZEV mandate is the new 2030 deadline for the phase-out of internal combustion engine (ICE) cars, brought forward from 2035. This means manufacturers must now stop producing ICE cars completely by 2030, and switch purely to EVs and compliant hybrid models.
- ICE van & LCV sales to continue until 2035
While ICE cars must now be phased out by 2030, the updated mandate allows for internal combustion vans and LCVs to be produced and sold until the end of 2035. This extension aims to promote a more gradual EV transition for commercial buyers, whose range and longevity requirements are often greater than retail drivers.
- Fossil fuel plug-in hybrid sales permitted until 2035
The updated ZEV mandate also permits plug-in internal combustion hybrids to be produced and sold until 2035, helping some manufacturers bridge the gap between pure ICE and EV models, and support gradual consumer adoption.
- Exemptions for smaller manufacturers
Smaller manufacturers (who produce under 2,500 vehicles per year) are exempt from the 2030-2035 hybrid requirements, meaning they can continue to produce ICE vehicles even beyond the 2030 deadline. This means that OEMs like McLaren and Aston Martin, who produce a limited number of premium vehicles, will be unaffected by the new deadlines, in recognition of their unique challenges.
- Non-compliance fines reduced from £15k to £12k
Fines for manufacturers who fail to meet annual ZEV production targets have been reduced from £15,000 to £12,000 per car and £18,000 to £15,000 per van. This means that while the stringent annual targets still stand, penalties for non-compliance are less severe.
- New carbon targets for manufacturers post 2030
While hybrids and internal combustion vans are still permitted to be produced between 2030-2035, manufacturers will be held to stringent carbon emission targets for these vehicles. OEMs will be required to ensure that total carbon emissions for these non-ZEV vehicles remain at least 10% below the emissions of their total sales from 2021.
- Increased flexibility for ZEV credit trading
The government has extended the ZEV credit trading scheme until 2029, which enables manufacturers to borrow ZEV credits from future years, or other manufacturers, to offset their continued production of ICE vehicles.
Each of these credits counts towards manufacturers’ annual ZEV production targets, helping them avoid non-compliance if they fail to meet the ratio of EVs to ICE production in a specific year. However, these credits must be repaid by 2030, meaning OEMs must ultimately make up for lower ZEV production in previous years.
Manufacturers can also trade credits between car and van production, with one ZEV van equivalent to two ZEV cars. This enhances flexibility for some manufacturers who are able to produce & sell more electric commercial vehicles, but have limited market penetration for their ZEV cars.
Implications for fleets & the wider auto industry
A more gradual approach to fleet EV rollout?
With the production of ICE LCVs now confirmed to continue until 2035, many fleets have a longer window than they anticipated to transition to electric vehicles. This may amount to a more gradual EV rollout for some operators, as they take more time to plan their transitions, roll out charging infrastructure, and find the optimal makes/models for their needs.
Chris Beeby, Director of Business Development at sopp+sopp, comments:
“The extended ZEV timeline gives fleets space to take a more gradual and adaptive approach to EV adoption - whether that’s rolling out charging infrastructure in stages, testing different makes and models to find the right ones for their need, or preparing drivers for the realities of new vehicle types.
We may see a more data-led, operationally aligned transition as a result – rather than one led strictly, by legislative demand.
Whilst the time period has been extended the biggest singular issue CV Fleets face is range and load capacity, let’s hope this extension coincides with clear enhancements in these critical areas across multiple OEM’s to drive choice and ultimately value for money..”
2. Another generation of internal combustion LCVs?
Now that automakers have the go-ahead to produce ICE LCVs and vans until 2035, it’s possible we may see another generation of petrol/diesel models in the decade to come. For many operators, the option to renew or expand their ICE fleet - for another decade - may be more appealing than transitioning purely to EVs. However, managing a mixed fleet of ICE, hybrid, and electric vehicles could introduce new logistical and compliance considerations, meaning operators will need to weigh up the practicalities.
3. More innovation for EV LCVs?
With more time before the full phase-out of ICE vans, manufacturers may use the extended window to further develop electric LCVs that better meet the specific needs of commercial users. Advances in battery range, payload capacity, and rapid charging could emerge in the coming years, possibly resulting in greater alignment between vehicle capabilities and fleet requirements.
4. Room for more adoption incentives?
Although the updated mandate includes some regulatory flexibility, EV adoption remains cost-intensive for many fleets. Without additional incentives - such as grants or tax relief - some operators may continue to evaluate the cost-effectiveness of transitioning, particularly where total cost of ownership still favours ICE or hybrid vehicles in the short term.
5. Do new EV-first automakers have an advantage?
The regulatory shift may further open the UK market to newer, EV-first manufacturers, many of whom are not constrained by legacy ICE production. Companies such as BYD, Chery, and Great Wall are increasingly targeting the UK, where tariff structures currently provide more favourable conditions than in the US or EU.
James Fisher, CEO of Gecko Risk, notes:
“New manufacturers have fewer regulatory hurdles and more competitive pricing, especially where UK tariffs are more accommodating. For the wider ecosystem of repairers, insurers, and data providers, this could introduce new pressures around approvals, risk modelling, and cost prediction.”
As these brands gain traction, downstream sectors such as insurance and repair may need to adapt to unfamiliar platforms, parts supply chains, and technical standards, all of which could influence pricing models and repair capabilities.