EV sales targets under review: what could a change to the ZEV mandate mean for UK fleets?
15th Sep 2026
The UK Government has launched a review into the Zero Emission Vehicle mandate, opening the door to a potentially slower increase in the proportion of new electric vehicles (EVs) manufacturers must sell versus their fuel equivalents.
Currently, 33% of a manufacturers’ new-car sales must be zero emission in 2026, rising to 80% in 2030 and 100% by 2035. The consultation will look at alternative trajectories, potentially reducing the 2030 requirement to 70%, 60% or even 50%.
Another option under review is whether to retain the existing trajectory but give more leniency to manufacturers on how and when they will comply.
This consultation opened on Friday, 14 August 2026 and will close on Friday, 23 October 2026. The Government has underlined its commitment to phasing out new cars powered by petrol or diesel from 2030 and for all new cars and vans to be zero emission from 2035.
So, what could a revised mandate mean for fleets?
Why is the mandate being reviewed?
The review is due to a growing tension over the transition to electric vehicles despite EV demand rising at pace.
In July 2026, battery electric vehicles (BEV) accounted for 27.5% of new-car registrations with volumes increasing by nearly 45% compared to July 2025. Across the first seven months of 2026, BEVs accounted for 25% of new car registrations in the UK.
The review reflects a growing tension within the transition to electric vehicles.
EV demand is rising. Battery-electric vehicles accounted for 27.5% of new-car registrations in July 2026, with volumes increasing by 44.5% compared with July 2025. Across the first seven months of the year, battery-electric cars represented 25.31% of registrations.
This remains below the mandate target of 33% in 2026 with the SMMT forecasting BEVs to account for just over 27% of vehicle registrations in the full year and nearly 33% by 2027 compared with a target of 38% for next year.
The SMMT argues that manufacturers are supporting demand with heavy discounting and incentives which may be difficult to sustain when targets rise in the coming years.
Further to this, the UK Government is looking into the wider economic pressures, including supply-chains, energy costs, international competition and tariff uncertainty. According to the consultation briefing, its objective is to maintain the direction of travel towards zero-emission motoring whilst ensuring the journey is commercially viable for manufacturers and affordable for customers alike.
The Government is also considering wider economic pressures , including supply-chain disruption, energy costs, international competition and tariff uncertainty. Its stated objective is to maintain the direction of travel towards zero-emission motoring while ensuring that the pathway remains commercially practical for manufacturers and affordable for customers.
What could a lower target mean for vehicle supply?
One possible outcome from this consultation is a broader mix of powertrains being available for longer.
If the 2030 target is watered down or reduced, manufacturers could have a greater opportunity to offer hybrid models, including mild hybrids and plug-in hybrids. For fleets, this could provide additional choice for drivers and operations that have an ongoing need for vehicles that are not battery-powered.
It may be particularly relevant for:
- High-mileage drivers with unpredictable daily journeys.
- Employees without reliable home-charging access.
- Specialist vehicle requirements not yet well served by electric alternatives.
- Light-commercial vehicle operations affected by payload, charging or duty-cycle constraints.
Such flexibility could help fleets avoid forcing themselves into unviable vehicles. However, this does not remove the need to prepare for going fully electric.
Could EV discounts become less aggressive?
One of the key implications that could arise from this consultation is around EV discounts and pricing.
The current mandate has created a need for manufacturers to offer strong incentives helping support EV registrations. In recent years, we’ve seen extensive discounting, enhanced finance offers and other support designed to drive demand.
Such incentives have helped drive demand, but it’s put heavy pressure on profitability and residual values.
What impact could this have?
The impact will vary greatly between brands. Some manufacturers who are close to targets may continue to push EV volume whilst those with a larger compliance gap to fill could use the additional flexibility to their advantage, rebalancing fuel mix and pricing.
For a fleet decision-maker, this is tricky water. The importance of looking beyond a vehicle’s list price is more poignant than ever. Total cost of ownership is more prevalent than ever before. Looking beyond a headline discount is vital.
What could it mean for residual values?
The discounting seen in the new-car market can affect used values because transaction prices have fluctuated so much in recent years, influencing expectations throughout the vehicle lifecycle.
Revising the mandate could reduce the pressure by allowing supply to align more closely with demand. On top of this, stable pricing could support a stronger residual value forecast and over time help leasing companies price vehicles with greater confidence.
Slowing mandated supply of new EVs could reduce the next generation of affordable used vehicles entering the market. It’s important to remember that the market will continue to be dictated by battery health, technological advancements, charging costs and consumer confidence.
A change could alter the balance but will not be the solution to EV value risk.
Does this weaken the business case for fleet electrification?
Not in our opinion. The mandate is all to do with the manufacturers’ sales mix. It doesn’t impact how operationally valuable or financially right an EV is for a fleet.
For many use cases, electric vehicles still provide competitive whole-life costs, lower running expenses and a more attractive proposition, especially for company cars where drivers still benefit from a lower Benefit-in-Kind tax (BiK).
The Government themselves say drivers charging at home could save nearly £1,500 a year in running costs, although this will vary depending on use cases, electricity tariff and the amount of public charging.
Fleets are pivotal to EV adoption. In July 2026, fleet registrations made up 59.9% of the total new-car market. The purchasing decisions made by businesses will continue to influence the pace of transition.
The case for switching to an EV should be based on driver-by-driver and fleet needs, not a national mandate and deadline.
What should fleets do now?
There’s no doubt the consultation brings uncertainty, but that doesn’t justify holding off on fleet planning. Businesses can use this period to strengthen their transition plans.
1. Continue with suitability analysis
Use real journey, mileage, dwell-time and parking data to identify vehicles that can move to electric without compromising operational performance.
2. Avoid a one-size-fits-all powertrain policy
A mixed transition strategy may remain appropriate in the short term. BEVs can be prioritised for suitable users whilst transitional powertrains are considered for harder-to-electrify roles.
3. Review replacement cycles
Vehicles ordered now may remain on fleet into the next phase of the mandate. Replacement timing should take account of future operating costs, taxation, clean-air requirements and expected access to charging.
4. Build charging into the vehicle decision
Home and workplace charging often determine whether an EV delivers its projected cost and convenience benefits. Vehicle procurement and charging planning should therefore take place together.
5. Model more than one scenario
Fleet budgets should consider the impact of different mandate outcomes, including changes to vehicle availability, manufacturer support, lease costs and residual values.
6. Keep communicating with drivers
Headlines about “cutting EV targets” may be interpreted as the transition being cancelled. It has not been. Clear communication can prevent uncertainty from reducing driver confidence or disrupting existing plans.
A change of pace, but not a change of destination
The review could help manufacturers out and give more flexibility to fleets over the period to 2030. It could mean a wider choice of vehicles for longer and reduce the risk of adopting electric vehicles too early where the use cases simply do not align yet.
It’s important to distinguish between additional flexibility and a reversal of any policy. The plan to phase out new cars relying on purely internal combustion engines by 2030 remains.
The stated endpoint is still 100% zero-emission new-car and van sales in 2035. It’s just how quickly that is achieved.
A sensible approach for fleets is to neither accelerate nor decelerate electrification regardless of suitability. It is and always should be an evidence-based approach.
At Driveway Vehicle Solutions, we’ve been helping businesses interpret market and policy changes to turn them into practical fleet solutions and strategies. Whether it’s vehicle selection and funding or how drivers use their vehicles most efficiently, our focus is on ensuring fleets are informed and drivers are happy.
