The UK Government needs to slow the pace of new car market electrification required by its ZEV mandate to make it achievable, rental and leasing industry bosses have suggested.
The mandate, which requires car manufacturers to sell a certain proportion of zero-emission vehicles each year or face fines, is set at 28% this year, and rises to 33% in 2026, before accelerating further towards the end of the decade.
Discussing the issue at the BVRLA’s Industry Outlook Conference, during a panel on the prospects for 2026, Richard Jones, CEO of leasing company Zenith, suggested these targets were too ambitious – particularly following the announcement in last month’s Budget of plans for a new pay-per-mile tax on EVs.
Jones said: “If you go on the adoption we’ve had over the last five years, compound growth on battery EV (BEV) has been about 21% a year. That’s not a bad trajectory to aim at.
“We’re at 22.8% [UK new car market share for EVs] as we sit today, so let’s say 23% [for 2025]. Next year, 28% feels like the right place to be – but that was before the pence-per-mile thing. I think we’ve just got to have a transition curve that’s believable.
“I believe in the BEV transition. I’ve driven BEVs for three years, they’re brilliant, they’re superior, they make sense, and the use cases in cars are profound.
“There’s a transition we have to believe in, but it has to be steadier than the ZEV mandate path.”
Following on from Jones, Lakshmi Moorthy, managing director of leasing company Arval UK and also chair of the BVRLA, said: “I totally agree, I think the ZEV mandate is too ambitious, and things like 3p-per-mile run the risk of derailing it.
“We are starting to see some positive trends as well. Particularly when I look at our remarketing channels – at Arval we have quite a diversified remarketing mix of channels – we’re actually seeing used car dealers buy a lot more used BEVs. Two years ago [it was] less than 5%, now close to 50% of our used car dealers do want to engage in buying BEVs.
“I think there are some green shoots and as an industry, if we’re given the chance, if we’re given sensible regulation, we will get the transition, because like Richard many of us do believe this transition can be achieved, just not at this breakneck speed, without supporting regulation.”
Another speaker on the panel, Gary Smith, managing director for the UK, Ireland, and the Nordics for Europcar Mobility Group, said that his company was seeing reduced pressure from manufacturers to take EVs.
He said: “We’re talking with manufacturers now about what percentage of EVs we are having to take in terms of our new vehicle purchases. The manufacturers are changing their approach, so we’ve certainly seen a difference in terms of the conversations we’re having and the amount that they’re trying to push EVs.
“I don’t know if they’re pushing them into other sectors and not my own, but they’re not being as aggressive as they used to be.
“I think they’re making a judgement that things are not going to be proceeding in the way that they are obligated in policy, so something is going to have to give.”
