The UK’s electric vehicle mandate is at risk of being undermined by ongoing confusion over a new government grant scheme, with motor manufacturers warning they are “operating in a fog” as they try to hit this year’s regulatory targets.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said that a lack of clarity over which electric car models will qualify for grant support is hampering strategic planning across the industry. Manufacturers were not consulted before the scheme was announced and are now grappling with unclear rules just as they head into key sales months.
“They thought, if I position this vehicle with this incentive behind it, it should deliver me this sort of market share,” Hawes said. “Now, you don’t know whether your competitors are suddenly going to have a price advantage on you, in which case your plans are worthless.”
The new grant, which aims to boost affordability at the lower end of the EV market, is set to come into force later this summer. However, eligibility details are not due to be released until August 11, leaving many in the sector without the data needed to forecast accurately or prepare their inventory and marketing strategies.
At the heart of the concern is the zero-emission vehicle mandate, which requires carmakers to ensure that at least 28 per cent of new car sales in 2025 are zero-emission models, rising to 80 per cent by 2030. Automakers that fail to meet the target could face financial penalties or restrictions.
The industry warns that an uneven rollout of the grant, or selective model eligibility, could distort the market and jeopardise compliance for those without qualifying models at the right price point.
“If they don’t have something in that volume and the market’s going into that sort of price level,” said Hawes, “then their sales forecasts are going to be more ambitious than the market.”
The concerns come against a backdrop of declining UK vehicle production, with car and commercial vehicle manufacturing falling by 11.9 per cent in the first half of 2025, largely due to global trade disruptions and continued economic uncertainty.
Despite the downturn in overall output, electrified vehicle production bucked the trend, rising 1.8 per cent to 160,107 units in the first half of the year—a record share. Electrified models, including hybrids, plug-in hybrids, and fully electric vehicles, now make up 41.5 per cent of all vehicles built in the UK in 2025.
Still, industry leaders warn that policy uncertainty and poorly communicated incentives could squander momentum at a critical time in the UK’s green transition.
The Department for Transport has not yet responded to calls for early publication of the model eligibility list. With the mandate now in effect, manufacturers are left in limbo—unsure of how the market will shift once the grant terms are revealed.
As Hawes put it, without the clarity manufacturers need to plan, “the impact is real—and the risk is that some carmakers miss their mandated EV targets through no fault of their own.”
