Adjustments to the Zero-Emission Vehicle (ZEV) mandate will provide only marginal financial relief to carmakers, saving just 3.5% of the revenue at risk due to looming 25% tariffs on UK car exports to the US, new research reveals.
According to Cox Automotive Europe, the cut in fines for missing 2025 ZEV targets – from £15,000 to £12,000 per car and from £18,000 to £15,000 per van – will save manufacturers £319m this year. Yet that figure pales in comparison to the £9bn in UK vehicle exports under threat from the US tariffs, sparked by escalating trade tensions.
The analysis, using SMMT data, predicts that manufacturers are likely to fall short of ZEV targets by over 100,000 units, continuing a trend of underperformance driven by sluggish consumer demand and high EV production costs.
The sector is still reeling from an estimated £6bn compliance bill in 2024, which included penalties and over £4.5bn in discounts to stimulate EV sales. Despite the government’s gesture, Cox warns the policy shift doesn’t go far enough.
“The adjustments to the ZEV mandate are marginal within the bigger picture,” said Philip Nothard, insight director at Cox Automotive. “As over 15% of the industry’s exports are under threat due to tariffs, along with complications in the global supply chain and inconsistent consumer demand for EVs, much more needs to be done.”
Nothard stressed that while the industry remains committed to an electric future, economic sustainability is critical. He called for consumer incentives, improved charging infrastructure, and cohesive long-term policy support to help manufacturers absorb the costs of electrification and maintain competitiveness on the global stage.
With Britain’s £93bn automotive manufacturing sector standing at a critical juncture, the spotlight is once again on how government and industry can collaborate to weather the dual storm of EV transition pressures and international trade barriers.