A two-year delay to the Zero Emission Vehicle (ZEV) Mandate policy could ultimately result in 2.7m fewer second-hand EVs being available in the years ahead, according to fresh research.
Analysis by the Energy & Climate Intelligence Unit (ECIU) has found a potential weakening of the ZEV Mandate could leave millions of drivers paying £1,600 a year more to run a petrol car than an EV, with the extra costs incurred by them adding up to around £40bn.
80% of car sales in the UK take place on the second-hand market – and upfront costs of second-hand EVs are now comparable to petrol equivalents, it reported.
New cars are generally sold on after just 3-4 years, so the speed at which new EVs are sold is critical to the growth of the second-hand EV market. In its first year, the ZEV mandate has been successful in driving up sales of new EVs as manufacturers competed to hit their targets by lowering prices.
EV sales increased by over 21% in 2024 on 2023, with the ZEV mandate targets having been met in their first year. Were the Government to weaken the mandate, the competition between manufacturers would lessen, prices would increase, and sales would slow down, according to the ECIU.
This would lower the number of households that would be able to get their hands on a second-hand EV, leaving them driving more expensive petrol and diesel cars for longer. Recent analysis from ECIU has found that the second-hand EVs can save their owners £1600 in ownership costs Demand for used EVs on Auto Trader in 2024 increased by 51%, with EVs the fastest-selling fuel type on retailer forecourts.
A recent report by CBI Economics, commissioned by the ECIU, also 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.
Colin Walker, Head of Transport at the Energy & Climate Intelligence Unit (ECIU), said:
“Families seeking to lower their driving bills by getting their hands on a cheap-to-run second-hand EV could be left stuck paying a £1,600 a year petrol premium simply because there aren’t enough electric cars to go round.
“The ZEV mandate, introduced by the last Government and continued by the current one, has been incredibly successful at driving competition up and prices down leading to hundreds of thousands of new EVs on UK roads.
“The UK is Europe’s largest EV market, beating the likes of Germany at making the shift to cheaper and cleaner electric driving. Parts of the car industry are pushing to slow the ZEV mandate, but doing so could not only leave millions of families worse off, but stall investment in charging infrastructure and cost the UK hundreds of thousands of jobs as we fall behind in the global race to build a car industry fit for an electric future.“
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