Will the ZEV mandate affect used car dealers?
A new mandate in the UK outlines the pathway for the Zero-Emission Vehicle (ZEV) transition by 2035, with 22% of all new cars sold in 2024 needing to be electric, rising to 80% by 2030 and 100% by 2035.
The ZEV mandate follows the previous decision from the Government to delay banning Internal Combustion Engine (ICE) vehicles from 2030 to 2035. This action allows consumers to switch to electric vehicles with less time restraint and allows further improvements in the national charging infrastructure.
The ZEV mandate demands that car and van manufacturers sell an increasing number of ZEVs as a percentage of their overall sales total; this starts this year, 2024, with a target of 22% for cars and 10% for vans, eventually rising to 100% by 2035.
Yearly ZEV Targets
YEAR | % OF ZEV CAR SALES | % OF ZEV VAN SALES |
2024 | 22% | 10% |
2025 | 28% | 16% |
2026 | 33% | 24% |
2027 | 38% | 34% |
2028 | 52% | 46% |
2029 | 66% | 58% |
2030 | 80% | 70% |
Whilst the government says the ZEV mandate will allow consumers to switch to an electric vehicle with less rush and support the growth of the second-hand electric vehicle market, the government has yet to answer calls from the motor industry to provide further incentives for purchasing new EVs.
As of the end of January 2024, there are currently no purchasing incentives for new EVs, with the only incentives being vehicle tax exemption, plug-in grants for vans and £350 towards the costs at charging points for people living in flats.
How does the ZEV mandate affect the second-hand market?
In our recent survey, 18% of respondents said they intended to purchase an electric car as their next vehicle, with only petrol vehicles beating out electric vehicles. What we need to understand is how the increase in electric vehicles purchased will trickle down and affect the used car market. V12 Vehicle Finance's Finance Director Tim Maffey said, 'In the short term, the lack of consumer incentives is likely to mean the bulk of ZEVs will continue to be purchased by Fleets. This is likely to mean that these vehicles will be hitting the used wholesale markets in 3 to 4 years.'
'The increase in used ZEVs in the market will likely build steadily over this period, however, how attractive these vehicles are to consumers will largely depend on how fast infrastructure improves. Early adopters in the used car market will most likely be using them as second vehicles with the ability to charge at home with a cheap electric rate. Dealers will need to start to consider what adjustments to make to accommodate ZEVs as volumes ramp up.'
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