Car industry on course to meet EV sales targets in 2025: analysis

New analysis from the Energy & Climate Intelligence Unit (ECIU) has found that the UK car industry is on course to hit the Zero Emission Vehicles (ZEV) Mandate’s 28% target for 2025.

The analysis comes amid calls in some quarters for the UK to follow the European Commission’s recent decision to weaken its EV sales targets [1] by weakening its own.

In designing the ZEV Mandate the previous Government included a so-called ‘flexibility’, that the car industry was in favour of [2], that means the target can be hit not just from the sale of EVs, but also from the sale of large numbers of lower emission petrol and diesel cars – the overall effect being to reduce tailpipe emissions. [3] The current Government has since extended this flexibility. [4]

Analysis of vehicle CO2 data from the Department for Transport and vehicle sales data from the Society of Motor Manufacturers and Traders (SMMT), together with projections for vehicle sales in December based on previous years’ sales trends, reveals that the car industry as a whole is on course to meet its targets under the ZEV mandate for the second year running. Earlier this year the Government confirmed the 2024 target had been achieved. [5]

While the headline EV sales target for the year is 28%, our analysis has found that the flexibilities in the ZEV mandate lower the percentage of EVs that the industry as a whole actually needs to sell to 20.4%. The rest of the target can be made up through the sale of lower emission petrol and diesel cars. So far this year (January to November) more than one in five new cars sold in the UK has been an EV (22.7%), [6] meaning the industry is on track to exceed the overall ZEV mandate target for the second year running.

Commenting on the analysis Colin Walker, Head of Transport at the ECIU, said: “Despite claims that sales targets would not be hit, it seems clear that in 2025, just as last year, the industry is on track. British drivers are increasingly choosing to switch to electric, so much so that, of the world’s largest car markets, the UK is now second only to China in the proportion of drivers buying new EVs. Be they new cars or regular families going electric on the second-hand market, British EV drivers are saving hundreds, even thousands, of pounds a year.

“Legacy manufacturers dominate EV sales in the UK with the likes of Ford, Renault and Mini recording significant sales increases, and Nissan beginning to drive the first of its brand new Leafs off its upgraded production lines in Sunderland.

“Were the UK Government to follow the EU’s lead and weaken its own ZEV mandate, it would risk slowing new EV sales and stunting the growth of the second hand EV market, leaving people stuck driving dirtier and more expensive petrol cars for longer. This is the big risk now being faced by drivers in the EU. It’s clear the world is only going in one direction on electric cars, so slipping into the slow lane is a recipe for getting left behind”.

The Department of Transport (DfT) stated in April 2025 that the car industry as a whole achieved a compliance rate of 24.3% in 2024, above the 22% headline target for sales for the year. [7] Recent analysis by the ECIU has revealed the annual running cost savings enjoyed by EV drivers in the UK are one and a half times – or £540 - higher than those enjoyed by EV drivers in Germany. [8]

A recent report by CBI Economics, commissioned by the ECIU, revealed that a failure by the car industry to make the transition to manufacturing EVs could see its contributions to the UK economy fall by as much as 73%, or £34.1bn, and over 400,000 jobs could be lost. Conversely, economic output could increase by over £16bn, and 167,000 new jobs could be created, if a rapid and successful transition takes place. Government support is critical in avoiding such an outcome, and this includes the provision of a stable and supportive regulatory environment through keeping measures like the ZEV Mandate in place. [9]

ENDS

Notes to editors

1. https://www.bbc.co.uk/news/articles/crk78y7k8ezo

2. https://www.gov.uk/government/consultations/a-zero-emission-vehicle-zev-mandate-and-co2-emissions-regulation-for-new-cars-and-vans-in-the-uk/outcome/zero-emission-vehicle-zev-mandate-consultation-summary-of-responses-and-joint-government-response

3. “If a manufacturer sells more ZEVs than their target, they will have a surplus of allowances they can sell, bank, or convert their excess allowances. If a manufacturer sells fewer ZEVs than their target, they can buy, borrow, use banked allowances or convert CO2 emissions allowances to meet their obligation” https://www.gov.uk/government/consultations/a-zero-emission-vehicle-zev-mandate-and-co2-emissions-regulation-for-new-cars-and-vans-in-the-uk/outcome/zero-emission-vehicle-zev-mandate-consultation-summary-of-responses-and-joint-government-response#overview-of-response

4. https://www.gov.uk/government/news/backing-british-business-prime-minister-unveils-plan-to-support-carmakers

5. https://www.gov.uk/government/consultations/phasing-out-sales-of-new-petrol-and-diesel-cars-from-2030-and-supporting-the-zev-transition/outcome/phasing-out-sales-of-new-petrol-and-diesel-cars-from-2030-and-supporting-the-zev-transition-summary-of-responses-and-joint-government-response

6. https://www.smmt.co.uk/november-new-car-market-struggles-ahead-of-budget-drag-on-demand/

7. https://www.gov.uk/government/consultations/phasing-out-sales-of-new-petrol-and-diesel-cars-from-2030-and-supporting-the-zev-transition/outcome/phasing-out-sales-of-new-petrol-and-diesel-cars-from-2030-and-supporting-the-zev-transition-summary-of-responses-and-joint-government-response

8. https://eciu.net/media/press-releases/2025/smart-british-ev-drivers-saving-more-that-german-counterparts-analysis

9. https://www.cbi.org.uk/media/qoxp3pn4/cbi-economics-eciu-ev-sector-report-2024.pdf

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