EVs are about to become more expensive

Consumers could see an end to “heavy” discounts on electric vehicles (EVs) as ministers look to water down net-zero targets, according to car industry experts. Under current laws, 80 per cent of all new cars sold in the UK must be electric by 2030 under the zero-emission vehicle (ZEV) mandate, rising from 33 per cent from 2026. It is understood that ministers are set to launch a consultation in the coming days on loosening these rules, with numbers ranging from 50 per cent to 70 per cent under consideration. Shorts The European Commission has already modified its plans to ban the sale of petrol and diesel vehicles by 2035, shifting the requirement for a 100 per cent ban on internal combustion engines to a 90 per cent zero-emissions target. Good deals on electric cars The Department for Transport (DfT) said it is “committed” to phasing out new petrol and diesel cars from 2030 but said it would “review the mandate to support British industry and investment”, with further details to be published in due course. It comes after intense lobbying from car manufacturers who argue the mandate is too strict and leads to huge, last-minute discounts on EVs as they attempt to hit their quotas to avoid fines of £12,000 for every non-compliant vehicle sold. Automotive industry experts have warned that watering down current net-zero rules is likely to reduce “particularly aggressive EV discounts” – but they added that ongoing market competition will ensure customers still get good deals on electric cars. Steve Huntingford, the editor of consumer title What Car?, said rowing back on net-zero rules around EVs could “lead to manufacturers being under less pressure to sell them, and therefore there’s no need to sell them at such a heavy discount”. But he said car makers will “still be in competition with other manufacturers”, meaning it is unlikely that EV discounts will “disappear altogether”. Huntingford noted that while purchase prices would be likely to increase, “whole-life ownership costs for consumers might not”. Since the most popular type of car finance – personal contract purchase – is based on the depreciation of a car’s value, balancing EV supply and demand would “strengthen resale value” and keep down monthly repayments, he added. The National Franchised Dealers Association (NFDA) said a relaxation of the ZEV mandate could lead manufacturers to “reduce some of the incentives currently being used to encourage sales”, but added that it could create a “healthier market” in the long term. “The priority should be making EVs genuinely attractive and affordable to consumers, supported by the right incentives and infrastructure, rather than relying on regulation to drive demand,” CEO Sue Robinson said. Steve Walker, head of digital content at weekly car magazine Auto Express, said watering down ZEV mandate targets would lessen the need for manufacturers to offer “particularly aggressive EV discounts”. But he said “fierce competition” means deals will continue, with incentives likely to be spread more evenly across petrol, hybrid and electric cars as manufacturers have more freedom. The Society of Motor Manufacturers and Traders (SMMT), the UK’s primary trade body for the automotive industry, recently told The Times that the current net-zero rules are “haemorrhaging billions in EV discounts”. ‘Our world is literally on fire’ But the EV sector has responded by claiming these concerns are overblown, with Autotrader sales data from June stating that petrol discounts reached 11.7 per cent, overtaking electric for the first time. The July publication states that average discounts on car sales were 10.3 per cent, with electric and petrol models averaging a higher 11.3 per cent. “The latest market data contradicts the suggestion that discounting is simply being caused by the ZEV mandate. All vehicles are discounted. It’s a competitive market,” said Tanya Sinclair, CEO of Electric Vehicles UK. Climate activists warn tweaking the ZEV mandate could ‘sabotage’ efforts to tackle global warming (Photo: Suffolk County Council/PA) She suggested that changing current EV sales targets could “create an unstable, uncertain market” which could deter consumers from buying an electric vehicle. Gurjeet Grewal, CEO of Octopus Electric Vehicles, said that “the ZEV mandate is working” by encouraging manufacturers to invest in electric cars and giving consumers the confidence to make the switch. “EVs are increasingly the best-value cars on the road and sales continue to grow at a remarkable pace,” he said. “The last thing we need is another policy wobble that confuses consumers and puts investors off just as the transition is accelerating.” Dominic Phinn, head of transport at Climate Group, warned that tweaking the ZEV mandate could “undermine any agenda for growth and economic competitiveness, and sabotage one of the cheapest, most effective climate protection tools we have at a time when our world is, literally, on fire”. A Department for Transport spokesperson said: “It’s never been easier or cheaper to own an EV. The ZEV Mandate is backed by £7.5bn to grow the market, boost EV manufacturing, increase sales and build up the UK charging network. “EV sales have surged almost 45 per cent compared with July last year, and we’ve helped over 160,000 drivers to buy through our Electric Car Grant, boosting sales whilst putting money back in people’s pockets.”