The UK’s Zero Emission Vehicle (ZEV) mandate is reshaping the automotive industry, accelerating the shift towards electric vehicles. January 2025 marked a significant milestone, with EVs accounting for 21.5% of all new-car registrations – a record-breaking start to the year. This impressive growth underscores the growing consumer demand for EVs and sets a positive tone for the year ahead.
ZEV Compliance and Market Performance
In 2025, electric vehicle sales saw a 34% year-on-year increase, up from a 15% market share in January 2024. Leading European manufacturers such as BMW, Volkswagen, Mercedes-Benz, Peugeot, Audi and Mini experienced the highest growth, with Mini’s electric car sales soaring from just 200 units in January 2024 to over 1,000 units in January 2025.
Source - New AutoMotive Report - Jan 2025
The latest ZEV compliance data reveals a mixed performance amongst manufacturers. While brands like BMW (34.4% BEV sales), Mercedes-Benz (36.6%), and Tesla (100%) are significantly exceeding targets, others such as Nissan (9.4%), Toyota (10.6%) and Mazda (1.7%) are falling short. Volkswagen Group, which includes Audi, CUPRA and Skoda, are close to compliance with 21.5% BEV sales. Meanwhile, Stellantis, which owns Peugeot and Vauxhall, sits at 20.9%, requiring further efforts to meet expectations. The early-year surge in EV adoption signals positive momentum, but lagging manufacturers will need to accelerate their electrification strategies to avoid compliance shortfalls.
Source - New AutoMotive Report - Jan 2025
Industry Adaption to ZEV Mandate
To stay competitive under the ZEV mandate, manufacturers are adjusting their strategies. Investments in battery technology, infrastructure, and cost reduction are helping drive EV adoption. Companies like Mercedes-Benz and BMW have leveraged these advancements to push beyond their targets, while Volkswagen and Stellantis are utilising hybrid and low-emission vehicle sales to balance their compliance efforts.
However, some automakers continue to struggle due to limited EV model availability and slower production scaling. Policy flexibility allows for CO2 credits, but long-term success will depend on the industry’s ability to meet consumer demand for affordable and efficient electric vehicles.
The Road Ahead
While the UK’s ZEV mandate has successfully accelerated EV adoption, challenges remain. The absence of Chinese manufacturers among the top EV sellers suggest the UK market remains dominated by European automakers. Meanwhile, infrastructure expansion and affordability remain key factors influencing consumer adoption.
Source - New AutoMotive Report - Jan 2025
Government Policy and Market Implications
Ben Nelmes, CEO of New AutoMotive, emphasised the importance of maintaining momentum: “Any sudden changes to the rules could put the brakes on all the progress the UK has made and undermine the billions of investment in charging points and battery factories which are set to create thousands of jobs here in the UK."
Dan Ceasar, CEO of Electric Vehicles UK, added that 2025 could set new records for BEV sales, predicting a market share of over 25% by year-end. However, the industry expects a surge in sales towards the latter half of the year as manufacturers adjust their strategies to meet compliance deadlines.
Conclusion
The ZEV mandate is proving effective in pushing the UK’s transition to zero-emission transport. With strong early-year EV sales, most manufacturers are on track to meet their targets, though challenges persist for lagging manufacturers. Government stability in policy enforcement, combined with continued investment in infrastructure and vehicle affordability, will be key to sustaining progress and ensuring the UK remains a leader in EV adoption.