ZEV mandate 2026: what the revised targets mean for you as a car buyer

The Zero Emission Vehicle mandate is a UK law, in force since January 2024, that requires every manufacturer selling cars in Britain to ensure a set percentage of those sales are fully electric. In 2026 that figure is 33%: one in every three new cars must be a battery electric vehicle. Fail to hit it and the fine is £12,000 per non-compliant car.

That obligation sits with manufacturers, not with you. But the pressure it creates flows directly into the showroom: it is the reason electric cars are being discounted so heavily, the reason some popular petrol models are harder to find than they should be, and the reason more than 160 electric models are now available at every price point. Understanding how the mandate works tells you when to buy, what to expect on price, and what the current review talk in Westminster actually means for your decision.

For a full overview of how UK electric vehicle policy is shaping the market, see our EV policy explained hub.

What the ZEV mandate actually requires

The mandate is a manufacturer-level obligation, not a consumer restriction. Each brand that sells new cars in the UK must ensure that a specific proportion of its annual UK sales volume consists of zero-emission vehicles, with that proportion rising every year until 2035.

To qualify as a zero-emission vehicle under the legislation, a car must have zero tailpipe CO2 emissions and at least 100 miles of WLTP electric range. Battery electric vehicles meet this automatically; hydrogen fuel cell vehicles also qualify. Plug-in hybrids do not count, because they have a combustion engine and produce tailpipe CO2.

The obligation is calculated per manufacturer, not across the market as a whole. A brand with large UK sales faces a larger absolute quota than a niche brand with smaller volumes. Manufacturers with fewer than 2,500 annual UK sales are exempt from the targets until 2029. Those producing under 1,000 units per year, including Aston Martin, McLaren, Morgan and Ariel, are exempt from the 2030 targets entirely. Northern Ireland operates a separate interim scheme based on scaled CO2 regulations; the full mandate applies in England, Scotland and Wales.

The legislation became law on 3 January 2024. The 2026 target for cars is 33% of new car sales; for vans the requirement is 24% of new van sales.

The full target schedule from 2024 to 2035

The annual targets rise steeply and without interruption through to 2035. Here is the full schedule:

Year	Car target (% BEV)	Van target (% ZEV)
2024	22%	10%
2025	28%	16%
2026	33%	24%
2027	38%	34%
2028	52%	46%
2029	66%	58%
2030	80%	70%
2035	100%	100%

The most demanding single-year step in the car schedule is the 14-point jump from 38% to 52% between 2027 and 2028. That step will create significant compliance pressure for any manufacturer still running large volumes of petrol and diesel sales, and it is the point at which the flexibility mechanisms described below will be stretched hardest.

The core end-points, 80% by 2030 and 100% by 2035, were not altered by the April 2025 government revisions. They represent the settled policy horizon that manufacturers, fleet buyers and infrastructure planners are working to. The trajectory between now and 2028 already feels steep; the trajectory from 2028 onward is steeper still.

The penalties: what happens if a manufacturer misses its target

The headline consequence of non-compliance is a fine of £12,000 for every zero-emission car a manufacturer should have sold but did not. For vans the figure is £15,000 per unit. Note that some earlier sources cited a higher £15,000 per-car figure; the £12,000 figure reflects the position following the April 2025 revisions and is the figure most widely reported by specialist sources since then.

To put the scale in context: an 8,000-unit shortfall against a 33% target would cost a manufacturer £96 million in fines. That is not a rounding error; it is a number that concentrates minds in every boardroom with UK operations.

Before paying any fine, manufacturers have four routes to compliance:

• Banking: surplus credits earned in years where a brand exceeds its target can be carried forward on a rolling three-year basis.
• Borrowing: manufacturers can borrow against future years’ credits, capped at 25% of the annual requirement in 2026, with a 3.5% compound interest charge applied.
• Pooling: brands under common ownership can pool credits across their UK portfolios.
• Credit trading: manufacturers running a deficit can buy credits from brands with a surplus, most notably Tesla, which generates far more credits than it needs.

These mechanisms are real and significant. They mean the effective compliance pressure is not as binary as the headline fine figure suggests. But they are not unlimited. The 25% borrowing cap in 2026 means a manufacturer cannot borrow its way out of a large structural shortfall. And credit trading has a market price; it is not free.

How the mandate affects what you can buy right now

The gap between where manufacturers need to be and where demand currently sits is the engine driving everything unusual you might have noticed in showrooms this year.

EV discounts. Manufacturers collectively discounted electric car sales by more than £5 billion in 2025, equivalent to roughly £11,000 knocked off the average BEV price. That did not happen because car brands suddenly became charitable; it happened because every discounted EV sale moved the needle on their compliance percentage. The same pressure is present in 2026, where the target has risen to 33% and actual market share is tracking considerably below that. If you are shopping for an electric car, you are buying into a buyer’s market that exists precisely because of the mandate.

The sharpest deals tend to concentrate at the end of each quarter, when manufacturers review their compliance position and, historically, push hardest to register additional EVs before the quarter closes. The end of June and the end of September are typically when dealers have the most room to negotiate. This is a structural consequence of how compliance is measured, rather than a guaranteed pattern, but it is a reasonable factor to weigh when timing a purchase.

Petrol supply restrictions. On the other side of the ledger, some manufacturers are reported to be managing their ZEV ratio by restricting the supply of petrol and diesel cars. Industry sources, including Honest John and Motor Trader, report that some brands have held completed petrol and diesel vehicles at ports rather than registering them, and have placed restrictions on dealer pre-registrations of combustion models. This artificially tightens supply and is pushing up prices on certain petrol models while extending delivery timescales. This behaviour is reported anecdotally rather than confirmed by named manufacturers, but it appears consistent with the compliance incentives manufacturers face.

More choice at lower prices. Around 160 electric car models were on sale in the UK as of early 2026, more than at any previous point. At the affordable end, sub-£23,000 options now include the Dacia Spring, Renault 5 E-Tech and Citroen e-C3. Private buyers who were previously priced out of the electric market have genuinely new options in 2026 that did not exist two years ago.

There is an important caveat on the discount dynamic. Despite mandate-driven incentives, only around 10% of non-fleet private purchases were electric in 2024 (figures vary, verify current data). The mandate’s heaviest lever is felt in the fleet and business market. Private buyers benefit, but often through indirect trickle-down rather than the headline-level discounts fleet operators can secure.

Which manufacturers are on track and which are under pressure

The market-wide picture makes for uncomfortable reading for the industry. BEVs accounted for 26.2% of new car registrations in April 2026, and for the first four months of 2026 the year-to-date share stood at 23.1%. The mandate requires 33%. SMMT now forecasts approximately one in four new cars will be electric in 2026, not the one in three the law demands.

Looking at 2024, the most recent year for which full annual compliance data is available, only three of the UK’s top ten car brands hit their ZEV target without relying on flexibility mechanisms: BMW at 26% EV share, Mercedes-Benz at 24%, and Hyundai at 24%, all meeting or exceeding the 22% 2024 requirement on actual sales alone. Stellantis reached 20%, below the target. Ford reached just 9%. The 2025 annual compliance data had not been published as of the date of this article.

Tesla generates large surplus credits that it can sell to manufacturers running a deficit. In effect, EV-specialist and EV-heavy brands are financially subsidising the compliance of volume manufacturers who lag. This credit market is a legal and intended feature of the system, but it does mean the compliance cost for underperforming brands is partly borne by their competitors’ sales.

The UK’s 2 millionth cumulative BEV was registered in April 2026. SMMT chief executive Mike Hawes welcomed the milestone but noted that natural demand remains “still well short” of mandate requirements.

The pressure on UK-assembled models is particularly acute given Britain’s gigafactory investment and the industrial stakes attached to domestic EV production.

The April 2025 revisions: what changed and what stayed the same

The rules buyers and manufacturers are operating under in 2026 are already a revised version of the original mandate. In April 2025, the Labour government introduced a package of changes following sustained industry lobbying. Understanding what changed, and what did not, matters.

What changed:

• The CO2-credit transfer cap was raised substantially, allowing manufacturers to meet up to 90% of their 2025 ZEV obligation via CO2 emissions credits, up from 45% previously. Note that this 90% cap applied specifically to 2025 obligations; it does not carry forward to 2026.
• Borrowing provisions were extended through 2029, rather than expiring after 2026 as originally planned.
• A new car-to-van and van-to-car bidirectional credit transfer mechanism was introduced.
• Self-charging hybrids, such as the Toyota Prius and Nissan Qashqai e-Power, were permitted to remain on sale until 2035 under a revised CO2 reduction framework.
• Small-volume manufacturers producing under 1,000 units per year were formally exempted from the 2030 80% target.

What stayed the same:

• The core annual ZEV percentage targets, including 33% in 2026, were not changed.
• The £12,000 per-car fine structure remained in place.
• The 2030 ban on new pure petrol and diesel cars was reconfirmed.
• The 80% by 2030 and 100% by 2035 end-points were left intact.

The practical effect of the April 2025 changes was to give manufacturers more ways to avoid paying fines in the near term without necessarily selling more EVs. Analysis from the International Council on Clean Transportation (ICCT) suggests this may marginally reduce the discount pressure compared with what it would otherwise have been, but the structural gap between the current roughly 23% market share and the 33% target means manufacturer incentives on electric models remain elevated regardless.

The 2026 review: what it could mean for targets

A formal review of the ZEV mandate was built into the original legislation and is due to be published in early 2027. That timetable is now under pressure from industry. SMMT and a number of MPs are calling for the review to be brought forward to 2026, citing the compliance gap and the cost to manufacturers.

At the SMMT Electrified Conference in 2026, Keir Mather MP, Minister for Aviation, Maritime and Decarbonisation, confirmed the government’s commitment to EVs and the existing targets, pointing to global energy security as a reason to continue the policy direction. However, Transport Secretary Heidi Alexander stated in the House of Commons on 21 May 2026 that she would “look again at the operation of the ZEV mandate.” That is not a commitment to change the targets; it is an acknowledgement that the mandate’s operation is under scrutiny.

SMMT director of policy Matthew Ogg described the current cost to industry as “unsustainable.” He told the Electrified Conference that manufacturers have collectively spent over £10 billion subsidising EV discounts over two years, and warned that if the issues are not resolved in 2026, the sector faces “a really precarious position next year.”

For you as a buyer, the review creates a three-way scenario: targets could remain unchanged, they could be reduced, or they could theoretically be raised (the least likely near-term outcome). If targets were cut, the compliance pressure would ease and the manufacturer incentives driving current EV discounts would soften. EV prices would likely firm up. The review outcome is not predictable from available information, and this article will not speculate on it. But if you are attracted by the current discount environment, the review is a reason to consider acting sooner rather than waiting.

Should this change when or whether you buy an EV?

If you are ready to buy an electric car, the mandate is working in your favour in a way that is unlikely to persist indefinitely. Manufacturers are discounting more heavily than at any previous point in the UK market. There are more models to choose from than ever, including genuinely accessible options under £23,000. The average manufacturer discount in 2025 was around £11,000 per BEV. Quarter-end timing, particularly the end of June and September, typically produces the sharpest deals as manufacturers push to improve their compliance position before the period closes.

If you want to buy a petrol or diesel car, the mandate is worth understanding because it is already affecting the market you are shopping in. Supply of certain models has been reported as artificially restricted as manufacturers manage their ZEV ratios. Delivery timescales on popular combustion models may be longer than normal, and some petrol trims command higher prices than a straightforward supply-and-demand analysis would predict. This does not mean petrol cars are unavailable, but it does mean the market is not behaving normally.

On the review question, we think waiting for a policy resolution before buying is unlikely to deliver a better outcome for most people. Even if targets were adjusted, the structural direction of travel is clear: 80% by 2030, 100% by 2035. The mandate is not going away. The compliance pressure driving current EV incentives exists precisely because demand is still lagging the required pace, and that gap is likely to close over time whether by policy adjustment or natural market movement. The window for buyer-friendly pricing is open now.

Alongside ZEV-driven discounts, the return of home charger grants for flat owners and renters has cut the total cost of switching further.

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Keep up with how UK policy is shaping the electric car market with our latest EV policy coverage. If you are weighing up making the switch, the home charger grants article covers what installation support is now available for renters and flat owners.