ANALYSIS
Industry leaders warn ZEV mandate ‘a fantasy’ as fleet realities bite
As the automotive industry warns that current ZEV mandate targets are a ‘fantasy’, manufacturers call for urgent government intervention to bridge the gap between regulatory ambition and the harsh economic realities facing fleet operators. Simon Harris looks at the facts.
The UK automotive industry has issued its most pointed warning yet to government over the Zero Emission Vehicle (ZEV) mandate, with SMMT chief executive Mike Hawes describing current targets as a “fantasy” that threatens to drive the sector “off the road”.
Speaking at the SMMT Electrified conference, Hawes revealed that manufacturers have already provided more than £10bn in EV discounts since 2024 to artificially prop up demand. With average discounts reaching £11,000 per vehicle on models with “negligible margins”, he warned the strategy is “simply unsustainable”.
While Minister for Decarbonisation Kim Mather MP insisted the Government’s commitment remains “ironclad” – pointing to 2024 compliance achieved through “flexibilities” – industry leaders painted a different picture of the 2027 “compliance crunch”.
Hawes noted that battery costs are 30% higher than anticipated when the mandate was conceived, while public charging costs have surged 120%. “The gap between ambition and demand is too great,” Hawes warned, noting that market share for electric cars must more than double and quadruple for vans in just two years. “I do not know anyone in the industry that actually believes they will be met.”
Photo credit: SMMT
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Manufacturers have already provided more than £10bn in EV discounts… the strategy is simply unsustainable
Mike Hawes chief executive, SMMT
For the fleet audience, the most bruising testimony came from Ford UK and Ireland chair Lisa Brankin. She highlighted a fundamental disconnect between regulation and the operational reality of commercial vehicle users.
Profiling data from Ford’s connected fleet shows that only 16% of commercial customers can currently operate without stopping to charge during the day. For the remaining 84%, the transition represents a direct hit to the bottom line. “You’ve got a driver that is sitting, being paid to charge a vehicle,” Brankin noted. “If you’ve got three people in that vehicle, you’ve lost an hour’s worth of productive time.”
Brankin further highlighted the “hard no” from SMEs, particularly those in trades where vans are taken home at night. High staff turnover makes investment in home chargers a risky capital outlay for businesses, while the 70p/kWh cost of public charging – compared to £20 per 100 miles for diesel – removes the economic incentive to switch.
Both Brankin and Hawes called for a more “technology neutral” approach. Brankin urged a rethink on the role of plug-in hybrids (PHEVs) as a “halfway house” for fleets, arguing that modern telematics can solve the historical issue of users not charging them.
“The end goal is CO2 reduction,” Brankin argued, suggesting the UK’s trajectory is “more ambitious than anywhere else in the world” and risks “distorted market situations”.
Martin Sander, Volkswagen Passenger Cars board member for sales, marketing and after-sales, added a global perspective, warning that while the industry is “rebuilding from scratch”, the speed of technology – specifically from new Chinese entrants – is underestimated. However, he echoed the sentiment that the “solid income stream” of servicing is diminishing as EVs require less maintenance, creating a secondary challenge for the retail networks supporting fleets.
Despite the SMMT’s plea for an immediate review to reflect “today’s realities”, the minister confirmed the Government will not publish its review of the mandate until early next year.
But unless the Government treats the matter with greater urgency, vehicle manufacturers in the UK insist the regulatory pace is currently outstripping both the infrastructure and the economic business case.
