The Department for Transport is relaxing the UK’s ZEV mandate rules for automakers and giving firms more support on meeting targets, responding to the US tariffs.

ICE vans and hybrid cars will be allowed on sale until 2035

The ZEV Mandate will now be changed to make it “easier for industry to upgrade to make electric vehicles” and allowing hybrid cars on sale until 2035, while delivering Labour’s manifesto commitment to stop sales of new petrol and diesel cars by 2030.

At the same time, new vans with an internal combustion engine (ICE) will also be allowed to be sold until 2035, alongside full hybrids and plug-in hybrid vans, responding to widespread concerns about the challenges of van electrification.

The updated ZEV mandate will maintain the existing phase-out dates and headline trajectories for cars and vans – which include targets this year of 28% ZEV sales for new cars and 16% for vans.

But the Government is now increasing flexibility of the mandate for manufacturers up to 2030, so that more cars can be sold in later years when demand is higher.

It’s also allowing hybrid cars – such as the Toyota Prius and Nissan e-Power – to be sold until 2035 to help ease the transition and give industry more time to prepare.

The Government will also exempt small and micro-volume manufacturers – supercar brands including McLaren and Aston Martin – from the ZEV mandate targets.

And the package will be backed by a modern Industrial Strategy, confirmed for full publication this summer, which will “help British businesses realise the potential of industries of the future”.

Prime Minister Keir Starmer said there was a huge opportunity to be harnessed here – with the UK being the largest EV market in Europe – but added that the UK was “easing pressure” on the industry, giving greater freedom on how to meet targets, following the US 25% levy on car imports that came into force last Thursday.

The changes follow the recent consultation with carmakers and the wider industry but are believed to have been accelerated by the US tariffs, which have already seen JLR pause exports to “address the new trading terms”.

Sir Keir Starmer said: “Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change.

“I am determined to back British brilliance. Now, more than ever, UK businesses and working people need a government that steps up, not stands aside.

“That means action, not words. So today I am announcing bold changes to the way we support our car industry.

“This will help ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence, as well as back with pride.

“And it will boost growth that puts money in working people’s pockets, the first priority of our Plan for Change.”

Transport Secretary Heidi Alexander said the “ambitious package of strengthening reforms” would protect and create jobs – “making the UK a global automotive leader in the switch to EVs” while meeting Labour’s core manifesto commitment to phase out petrol and diesel vehicles by 2030.

ZEV mandate “flexibilities” to support UK manufacturers including extending the current ability to borrow credits from future years in 2024-26, to enable repayment through to 2030.

Other more flexible measures include extending the current ability to transfer non-ZEVs to ZEVs from 2024-26 out to 2029, giving significant additional flexibility to reward CO2 savings from hybrids. Caps will be included to ensure credibility.

The scheme also gets a new flexibility, allowing for van to car transfer, i.e. one car credit will be exchanged for 0.4 van credits, and 1 van credit will be exchanged for 2.0 car credits.

The changes to the UK’s EV rules come after months of warnings from Stellantis, Nissan and Ford among others, about the stringent rules, which led to Vauxhall confirming the closure of its Luton plant in February 2025.

While many pro-EV groups and the charging sector had called for the Government to stand firm on the ZEV mandate, there was some consensus that change was necessary.

Quentin Willson, founder of EV advocacy group FairCharge and Electric Vehicles UK advisory board member, said: “We understand the pressure British car makers face and welcome the Government’s declaration of support. While we don’t agree that hybrids mainly powered by a combustion engine should be included in the ZEV mandate until 2035, we do understand the reasons why, along with increased flexibilities until 2029.

“What we do want to highlight very clearly is the Government’s recognition that Britain is now a major player in the global electric car sector and that there are tremendous opportunities to create GDP, skills, jobs and economic activity. We have been saying this for years, but for Number 10 to now declare that this is a critical moment in Britain’s ambitions to become one of the most successful and creative EV markets in the world is a mighty step forward.”

But Dan Caesar, CEO of Electric Vehicles UK, had this warning: “China is set to cement itself as the biggest car exporting country in the world, and vehicles with plugs will dominate market share from 2030 onwards. While there’s some cautious reasons to be optimistic about the UK’s trajectory, and its ZEV mandate, its dilution is in stark contrast to the accelerating ambition of the Chinese and others. UK-based automakers need to fully embrace battery electric or be significantly diminished in time, running the risk of continued job losses.”

Charge UK strongly welcomed the Government confirmation of the 2030 phase-out date and the headline trajectories for EV sales but said that weakening the ZEV mandate via “back-door amendments” would create uncertainty for investment in EV charging infrastructure.

Vicky Read, CEO of the trade body for the charging sector, said: “It is now vital that today’s announcement is swiftly accompanied by the comprehensive package of measures to help drivers to switch that the Government has promised and which will smooth the path for charging investment.

“Without these measures, we will confine the UK to the slow lane on the transition to electric vehicles instead of going further and faster as ministers have repeatedly promised.”