How the car industry has reacted to Starmer’s watered-down EV targets

The Government has announced tamer measures for car manufacturers in the push towards Net Zero.  

While the 2030 ban on new petrol and diesel cars is still going ahead, the Government has announced numerous policy tweaks on the road to getting there – including allowing hybrids to be sold until 2035 and exempting small volume manufacturers from the deadline at the end of this decade.

White van men and women will still be able to get their hands on diesel commercial vehicles until 2035 in a major win for business owners not wanting to go electric, and the once strict Zero Emission Vehicle (ZEV) mandate – forcing brands to increase their EV mix of sales each year from 28 per cent in 2025 to 80 per cent in 2030 – has been dramatically watered down. 

As usual, with government’s backtracking has triggered strong reaction from across the automotive sector, the charging industry, and think tanks all voicing their opinion on the impact of the decisions. 

So, how have different players responded to the government’s most recent proposals for relaxing the switch to greener motoring?

We’ve broken down the reaction into groups to detail the fallout of Keir Starmer’s backdown from tough EV measures…

Prime Minister Keir Starmer delivers a speech during his visit to the Jaguar Land Rover factory in Solihull to detail how the government will support the car industry in light of Trump’s ‘reciprocal tariffs. Here’s the reaction from inside the sector…

What the EV industry has said…

For months, the EV industry has called for clarity and better incentives to help increase EV uptake, especially amongst private buyers – think more carrot and less stick.

The fact that the government has, as SMMT chief exec Mike Hawes says, ‘listened to the EV industry and recognised the intense pressure manufacturers are under’ is a step in the right direction.

However, the lack of incentives is still an issue.

The trade body boss told us: ‘Growing EV demand to the levels needed still requires equally bold fiscal incentives, however, to give motorists full confidence to switch.’

The AA agrees. Edmund King, AA president, added: ‘Today’s announcements are a pragmatic step forward which we hope will help manufacturers and give confidence to drivers. 

‘The inclusion of hybrids can act as a stepping stone to help those not yet ready to make the full switch to electric.

‘Our consistent message to government is more needs to be done to make EVs accessible for everyone. Generally, drivers are hesitant, but most are not hostile to the change.’

AA president Edmund King called the announcements a ‘pragmatic step forward’ but like many others believes more needs to be done to incentivise drivers to switch

One of the key incentives is a reduction on charging VAT, but some charging companies are concerned that the leniency given to the ZEV mandate will weaken the drive to electric.

Vicky Read, CEO of Charge UK, told This is Money: ‘After months of uncertainty, we strongly welcome the Government confirming the 2030 phase out date and the headline trajectories for EV sales. 

‘However, by introducing back door amendments the ZEV Mandate has been weakened, creating uncertainty for investment in EV charging infrastructure. It is now vital that today’s announcement is swiftly accompanied by the comprehensive package of measures to help drivers to switch that the government has promised and which will smooth the path for charging investment.’

Another key concern is that Donald Trump’s new 25 per cent tariffs on US automotive imports will exacerbate the potential job losses the ZEV mandate is said to be responsible for creating. 

Unite general secretary Sharon Graham doubled down on the need to relax VAT to encourage take up and to maintain jobs, even suggesting an extension to 2035 again: ‘While today’s announcement by the government on ZEVs and hybrids is welcome, it is not enough to reverse the damage being done to a UK automotive sector in crisis, which has already lost one plant and includes several others at high risk,’ she said.

‘We urgently need to look at additional measures such as VAT exemptions and if we can’t get a real jobs plan for the sector in time for 2030, we will need to go back to the 2035 deadline for all ICE vehicles.’

‘What the U.K. needs is real incentives to help consumers make the switch to electric mobility’, says Lisa Brankin, Chair of Ford UK and MD of Ford of Britain and Ireland

EV maker Polestar is happy that the Government’s ‘rightly supported British car manufacturing in the face of tariffs’ but have called the relaxation on hybrid sales ‘disappointing’

How car manufacturers responded…. 

Some manufacturers have taken the opportunity to reiterate their stance that these while the government’s new updates will ‘help alleviate financial penalties’ the full benefits don’t go far enough.

Lisa Brankin, Chair of Ford UK and MD of Ford of Britain and Ireland, said: ‘The government’s response to the substantial ZEV mandate consultation is a small step in the right direction, but it is not the giant leap required to address the especially challenging electric vehicle market conditions. 

‘Ford has always supported the UK government’s ambitious Net Zero targets and have invested billions in product development, manufacturing, and marketing to bring a full range of electric vehicles to customers. 

‘What the UK needs is real incentives to help consumers make the switch to electric mobility.’

Lisa Brankin, Chair of Ford UK and MD of Ford of Britain and Ireland is also calling for greater incentives as manufacturers have already invested billions in Net Zero

However, for others the more pressing issue is that, while the relaxation of some of the ZEV’s most stringent criteria is good news for car makers, the full effects can’t be felt due to the crisis caused by Trump tariffs.  

Adrian Mardell, CEO of Jaguar Land Rover, one of the manufacturers likely to be worst hit by Trump’s ‘Liberation Day’ announcements, told us: ‘We welcome the increased flexibilities in the ZEV mandate, which is a positive step in giving UK automotive the confidence to invest in its electric future. 

‘However, the application of US tariffs on our sector will cause serious harm and this is critical work the Government need to resolve.’

EV-only manufacturers like Polestar also agree that ‘the Government has rightly supported British car manufacturing in the face of tariffs’ but have called the relaxation on hybrid sales ‘disappointing’ because it removes the ‘sense of urgency in transitioning to a cleaner future’.

Managing director of Polestar UK, Matt Galvin, commented: ‘This change gives manufacturers the green light to continue investing in vehicles powered by fossil fuels.’

He, like Ford’s Lisa Brankin, called for more incentives for new car buyers, adding: ‘Once again there is absolutely nothing in today’s announcements to support the private buyer to make the transition to EV.   

‘We strongly urge ministers to use fines from the ZEV mandate to support the retail consumer with urgently needed incentives. 

‘This could be in the form of temporary relief on VAT on new electric vehicles and revisions to the expensive car supplement threshold to £52,000, which was set in 2017, to reflect inflation.’

Greenpeace is worried about Chinese EV competition saying: ‘The climate emergency is not going to wait for the UK to get our act together, and nor will Chinese electric vehicle makers’

The reaction from environmental groups… 

Unsurprisingly, green groups have had their say on Starmer’s watered-down EV ambitions.

There’s been an overwhelming sense that clarity is at least a move in the right direction – for both industry and drivers – but that the real issue of incentivising uptake hasn’t been addressed.

This is the case for EVA England, a membership organisation acting as the voice for EV owners, which say that the Government’s 2030 confirmation is ‘encouraging’ as a ‘roadmap to help drivers plan ahead’ but that the transition ‘won’t take hold on its own’.

Warren Philips, Chair of EVA England, commented: ‘It is disappointing no additional measures were included today for drivers who, similarly to car manufacturers, need some support to make the switch. 

‘We need Government input to tackle high EV upfront costs in the short term and to help more households access charging affordably, especially for those who can’t easily plug in at home. 

‘Failing to tackle prevailing barriers to uptake will scupper the Government’s rightly ambitious targets to move away from petrol and diesel this decade.’

Other environmental groups pushed back against the government’s move to allow hybrid cars to be sold until 2035 but are happy that minsters recognise the UK as a major player in the EV global market.

Quentin Wilson, Founder EV advocacy group FairCharge and Electric Vehicles UK advisory board member, is understanding of the government’s move to extend hybrid sales to 2035 despite ‘not agreeing’ but believes it’s a critical moment for Number 10 to make the UK a leading EV power

Quentin Willson, founder of EV advocacy group FairCharge, said: ‘While we don’t agree that hybrids mainly powered by a combustion engine should be included in the ZEV mandate until 2035, we do understand the reasons why, along with increased flexibilities until 2029.

He continued: ‘For Number 10 to now declare that this is a critical moment in Britain’s ambitions to become one of the most successful and creative EV markets in the world is a mighty step forward.’

Other green groups though outwardly criticised the updates, and were far less understanding, believing that ‘extended flexibilities’ via an extension from 2026 to 2029 for carmakers to comply with ZEV targets by borrowing and earning credits will ‘erode the policy certainty’ and prevent British manufacturing from ‘competing globally’.

Anna Krajinska, director at think tank Transport & Environment UK, condemned the move saying: ‘Weakening the ZEV mandate over American tariffs is baffling, especially when most of our car exports to the US are still petrol and diesel. 

‘Rolling back EV targets won’t protect those exports or jobs. What the sector really needs is regulatory certainty and a robust industrial strategy to support domestic manufacturing and stay competitive as the world goes electric.’

The issue of Chinese competition is a huge concern to some green campaigners as well. 

Dr Doug Parr, policy director at Greenpeace UK, commented: ‘It undermines investment, risks consolidating Chinese leadership in the sector and could slow the move to clean transport for those selling vehicles in the UK. 

‘The climate emergency is not going to wait for the UK to get our act together, and nor will Chinese electric vehicle makers.’