Zero Emission Vehicle Mandate changes explained

On 6th April 2025, the government announced changes to something called the Zero Emission Vehicle Mandate (ZEVM). This is the government’s pathway towards all new cars and vans being zero emission by 2035.

The changes to the ZEVM are designed to make it easier for industry to upgrade to make electric vehicles, while still delivering the commitment to end sales of new petrol and diesel by 2035.

What are the changes to the Zero Emissions Vehicle Mandate?

There are several key changes to the ZEVM.

The first change is to give car manufacturers more freedom on meeting the 2030 phase-out date of new diesel and petrol car sales. Manufacturers will now be allowed to sell more cars in later years when demand is higher. Hybrid cars such as the Toyota Prius will be also allowed to be sold until 2035, helping to ease the transition. For similar reasons, it will be possible to sell vans with an internal combustion engine until 2035.

Interestingly, small and micro-volume car manufacturers such as Aston Martin and McLaren will be exempt from the 2030 phase out.

The government has also said that it will continue to boost demand for electric vehicles. This will be on top of £2.3 billion it has already committed to boost manufacturing and improve charging infrastructure.

The government’s news release also says it will press on with tax breaks to encourage people to switch to zero emissions vehicles.

What do the ZEVM changes mean for my business?

If your company has a fleet, the Zero Emissions Vehicle Mandate changes can help you to plan ahead.

Firstly, electric vehicle (EV) salary sacrifice is still excellent value. This is because zero-emissions vehicles retain the lowest benefit in kind (BiK) rates, making them attractive to employees. It’s also worth noting that BiK rates for hybrids will rise faster over the coming years, making them less cost effective.

Secondly, it’s clear that EVs will remain cheaper to run. The government claims that drivers can “save £1,100 a year compared to petrol if they charge overnight at home.” In addition, 29 brand new electric cars are currently on the market for under £30,000. Half of used electric cars sell for under £20,000.

Additionally, while Vehicle Excise Duty for electric vehicles went up from 1st April 2025, it is still significantly cheaper than it is for diesel, petrol or hybrid vehicles.

In short, while the changes to the Zero Emissions Vehicle Mandate give more wriggle room to manufacturers as they phase out more polluting cars and vans, little changes for consumers or businesses. While you’ll be able to buy hybrid cars (or vans with internal combustion engines) for a bit longer, there’s no real financial incentive to do so. Whether you’re buying or leasing vehicles for yourself or your business, choosing electric is going to be increasingly cheaper in the years ahead.

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