Sir Keir Starmer is reportedly preparing to overhaul one of Britain's flagship green motoring policies following mounting warnings that it threatens jobs and increases costs for motorists.
Major Retreat from Net Zero Agenda
In a significant retreat from Labour's net zero agenda, ministers are expected to relax rules that compel car manufacturers to sell an increasing number of electric vehicles. The move is driven by concerns from industry leaders, trade unions, and business ministers that current targets are unrealistic and risk damaging a crucial manufacturing sector.
Under existing regulations, 80% of all new cars sold in the UK must be fully electric by 2030. However, reports indicate that target could be dramatically reduced to just 50%.
Setback for Ed Miliband
The decision represents a major setback for Energy Secretary Ed Miliband, who has championed the rapid transition to electric vehicles as part of Labour's drive towards net zero emissions.
Industry leaders have repeatedly warned that the rules force manufacturers into costly discounting programmes to persuade reluctant consumers to switch to battery-powered cars.
Fines and Costs
Companies that fail to meet government quotas face fines of up to £12,000 for each vehicle sold above their permitted limit. The industry estimates the policy has already cost manufacturers around £10 billion in its first two years through incentives, discounts, and compliance measures.
The Zero Emission Vehicle (ZEV) mandate, introduced by Boris Johnson's government, came into force in 2024. It required 22% of car sales to be electric in its first year, rising steadily to 80% by 2030. That year also marks the planned end of new petrol and diesel car sales in Britain.
Job Loss Fears
Motoring bosses have warned that the pace of change is outstripping consumer demand, despite growing interest in electric vehicles. The prospect of factory closures and job losses is understood to have been a decisive factor in Starmer's intervention.
Sharon Graham, general secretary of the Unite union, recently warned that the policy was "significantly contributing to the loss of automotive jobs in Britain." She stated: "This is a clear fact. The targets must be radically reduced. If the government sits on its hands it will be responsible for the decimation of the automotive industry."
The UK automotive sector contributes around £25 billion annually to the economy, supports 183,000 direct jobs, and a further 600,000 positions throughout the supply chain.
Labour MP Liam Byrne, chairman of the Business and Trade Select Committee, has also cautioned ministers that manufacturers are spending billions subsidising electric vehicle sales to meet government targets.
Alignment with Europe
The expected changes would bring Britain closer to the approach adopted in Europe. The European Union has already softened its own plans, replacing rigid electric vehicle sales targets with broader carbon reduction goals and allowing a greater role for hybrid and conventional vehicles beyond 2030.
However, environmental campaigners and charging industry bosses have reacted angrily to reports of a climbdown. Simon Smith, chief executive of charging specialist Voltempo, said weakening the mandate would reward the "slowest movers" in the industry. He told the Sunday Times that motorists are increasingly choosing electric vehicles because they offer lower running costs and protection from volatile oil prices.
Consultation Ahead
The government is expected to launch a consultation on the proposed changes in the coming weeks. Any overhaul would also require agreement from devolved administrations, raising the prospect of a political battle with ministers in Scotland and Wales over the future direction of Britain's green transport policies.
