What is the ZEV mandate?
The Zero Emission Vehicle (ZEV) mandate is a UK government policy that requires car manufacturers to ensure a minimum percentage of their new car sales are zero-emission, which in practice means battery electric. The mandate was introduced in January 2024 and sets escalating annual targets through to 2030.
It applies to every manufacturer selling cars in the UK. If a manufacturer falls short of its target, it faces a fine of £15,000 per non-compliant vehicle. That's a serious amount of money. A manufacturer selling 100,000 cars and missing a 33% target by 5 percentage points would face a potential fine of £75 million.
The targets: how fast does it ramp up?
The ZEV mandate targets rise steeply:
2024: 22% of sales must be zero-emission. 2025: 28%. 2026: 33%. 2027: 38%. 2028: 52%. 2030: 80%.
The jump from 38% to 52% in 2028 is the steepest single-year increase and will put the most pressure on manufacturers. By 2030, only one in five new cars sold will be allowed to have an internal combustion engine.
Are manufacturers hitting the targets?
It's mixed. Some brands, like Tesla, MG, BYD and Polestar, sell exclusively or predominantly electric and exceed targets easily. They can bank surplus credits or sell them to other manufacturers.
Traditional manufacturers are struggling more. Electric vehicles represented around 20 to 23% of new sales through 2024 and 2025, which meant many brands needed to use the flexibility mechanisms (borrowing from future years) to avoid fines. Ford, Honda and Mazda have faced particular challenges due to their smaller EV ranges.
The industry response has been aggressive discounting. EV discounts have risen over 200% since the mandate took effect, far outpacing discounts on petrol and diesel cars. Manufacturers are willing to sell EVs at or below cost rather than pay £15,000 per car in fines.
The flexibility mechanisms
The mandate includes some breathing room. Manufacturers can borrow credits from future years, up to 75% of their annual target in 2024, declining to 25% by 2026. This lets them smooth out shortfalls but creates a debt they must repay through higher EV sales later.
They can also trade credits. A manufacturer that exceeds its target (like Tesla) can sell surplus credits to one that falls short (like a traditional brand with few EV models). This credit trading is big money for pure-EV manufacturers and a real cost for the ones falling behind.
What this means for new EV buyers
The mandate is good news if you're buying a new EV. Manufacturers need to shift electric cars to hit their targets, which means competitive pricing, generous finance deals and better part-exchange values. The government has also extended EV purchase grants of up to £3,750 as part of a £3.6 billion support package.
The flipside: new petrol and diesel cars may get more expensive. Manufacturers are cross-subsidising EV discounts by increasing ICE prices, and the £15,000 fine effectively puts a floor under the cost of selling a non-electric car. If you're considering switching, the financial case for going electric is getting stronger every year.
What this means for used EV buyers
The mandate's biggest impact on the used market is supply. As manufacturers push more new EVs out the door, many on two-to-three-year lease deals, those cars return to the used market in waves. This is exactly what happened in 2023–2024, when a flood of lease returns drove used EV prices down sharply (see our EV depreciation guide).
For used buyers, this is excellent. The mandate ensures a steady and growing supply of relatively young used EVs at competitive prices. A three-year-old EV that was originally discounted to hit the mandate target, then returned from a lease, is a genuinely good deal: modern technology, good battery health, and a price well below what the first owner paid.
The used EV market is already responding: sales surged 67% year-on-year in 2026, and used EVs are now selling faster than the wider used car market. As awareness grows and charging infrastructure improves, this trend should continue.
The bigger picture
The ZEV mandate is part of the UK's broader net-zero strategy. Whether you agree with the policy or not, it's creating a market dynamic that benefits EV buyers, especially used buyers. New EVs are being discounted, used supply is growing, and the economics of running an EV on a cheap home charging tariff continue to improve relative to petrol.
For a practical comparison of what running an EV actually costs versus a petrol car, see our EV versus petrol running cost guide. Or jump straight to the TCO comparison tool to see the numbers for specific models.