Prime Minister unveils plan to support UK carmakers in the transition to e-mobility

British car brands like Rolls-Royce, Vauxhall and Land Rover are being given certainty, stability and support as the Prime Minister, Keir Starmer, sets out plans to back industry in the face of global economic headwinds today (7 April 2025).

The Zero Emission Vehicle (ZEV) Mandate will be changed to make it easier for industry to upgrade to make electric vehicles (EVs) while delivering the manifesto commitment to stop sales of new petrol and diesel cars by 2030, which will help even more British consumers access the benefits of cheap to run EVs.

The package will be backed by a modern Industrial Strategy, to be published in full this spring, which will help British businesses realise the potential of industries of the future.

The changes, which reflect extensive consultation, will help the car industry by:

• increasing flexibility of the mandate for manufacturers up to 2030, so that more cars can be sold in later years when demand is higher
• allowing hybrid cars – like the Toyota Prius and Nissan e-Power – to be sold until 2035 to help ease the transition and give industry more time to prepare
• continuing to boost demand for electric vehicles, with a new charge-point popping up every half an hour
• pressing on with tax breaks worth hundreds of millions of pounds to help people switch to electric vehicles

Support for the car industry will be kept under review as the impact of new tariffs become clear.

This package is the latest in a series of pro-growth measures that the Prime Minister is announcing to counter the impact of new global headwinds and build a strong, resilient economy with more well-paid jobs.

Prime Minister, Keir Starmer, says: “Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change. Now more than ever UK businesses and working people need a government that steps up, not stands aside. That means action, not words.”

“So today I am announcing bold changes to the way we support our car industry. This will help ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence, as well as back with pride,” he adds.

Transport Secretary, Heidi Alexander, indicates: ” Our ambitious package of strengthening reforms will protect and create jobs – making the UK a global automotive leader in the switch to EVs – all the while meeting our core manifesto commitment to phase out petrol and diesel vehicles by 2030.”

She continues: “Once again, the Prime Minister’s decisive and bold actions show how we’re on the side of British business while harnessing the opportunities of the zero emissions transition to create jobs and drive growth, securing Britain’s future, and delivering our Plan for Change.”

In recognition of the changing global trading landscape, the government has worked with the industry to both strengthen its commitment to the phase out and introduce practical reforms to support industry meet this ambition.

Demand for electric vehicles is already rising, with the latest data showing sales in March were up over 40% on last year, which will help with the transition.

There is a huge opportunity to be harnessed here – with the UK being the largest EV market in Europe.

Over £6 billion of private funding is lined up to be invested in the UK’s chargepoint roll-out by 2030.

Since July, the government has also seen £34.8 billion of private investment announced into UK’s clean energy industries.

The updated ZEV Mandate will ensure flexibilities support UK manufacturers by: 

• maintaining the existing phase-out dates and headline trajectories for cars and vans
• extending the current ability to borrow in 2024-26, to enable repayment through to 2030
• extending the current ability to transfer non-ZEVs to ZEVs from 2024-26, out to 2029, giving significant additional flexibility to reward CO₂ savings from hybrids – caps will be included to ensure credibility
• introducing a new flexibility by allowing for van to car transfer, i.e. 1 car credit will be exchanged for 0.4 van credits, and 1 van credit will be exchanged for 2.0 car credits 

The wide-ranging package of measures introduced will also exempt small and micro-volume manufacturers – supercar brands including McLaren and Aston Martin – from the 2030 phase out, preserving some of the UK car industry’s most iconic jewels for years to come.

Vans with an internal combustion engine (ICE) will also be allowed to be sold until 2035, alongside full hybrids and plug-in hybrid vans.

Chancellor of the Exchequer, Rachel Reeves, states: “The world is changing but we are determined to deliver for working people, protect their jobs and put more pounds in their pockets. That is why we are backing British business and investing in industries of the future, including our car manufacturers.”

Energy Secretary, Ed Miliband, says: “It is very important that the government has strengthened our commitment to our world leading EV transition plan. This plan will benefit UK consumers by expanding the market for cars that are cheaper to run. And it will support our domestic manufacturing so we can seize this global opportunity.”

Business Secretary, Jonathan Reynolds, indicates: “This pro-business government is taking the bold action needed to give our auto sector the certainty that secures jobs, drives investment and ensures they thrive on the global stage. Our Industrial Strategy will back the country’s high growth sectors, including advanced manufacturing, so we can grow the economy and deliver on the promises of our Plan for Change.”

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