The government’s recent decision to make changes to the Zero Emission Vehicle (ZEV) mandate has been welcomed by manufacturers. In the face of domestic economic difficulties and the slow pace of transition to electric vehicles, the move has been seen by many as sensible. However, many in the fleet industry have questioned it, and while they are grateful for the extra time to change from diesel, petrol, and hybrid vehicles, with benefit in kind costs for hybrids set to rise in 2028 and manufacturers inevitably slowing down their drive for electric vehicles (EV), does it provide short-term relief but long-term pain for fleets?
In this blog, we’ll look at what these changes mean for car, van, and HGV fleet owners in the short and long term. We’ll also consider what the move to electric vehicles could mean for fleet insurance costs.
We hope this blog will prove useful. If you’d like more fleet insurance help or a fleet insurance quote, please contact Instatruck on 01332 320540. Our award-winning team of independent insurance brokers will be happy to give you all the help you need and provide you with a great value HGV, truck or fleet insurance quote.
What changes have been made to the ZEV Mandate?
The changes to the ZEV Mandate are significant. The government confirmed it is ending the sale of new petrol and diesel cars from 2030, but that hybrids can be sold until 2035 and some small manufacturers – such as Aston Martin and McLaren – will be exempt from the ban. Vans with internal combustion engines (ICE) will also be sold until 2035, alongside hybrids and plug-in hybrid light commercial vehicles (LCVs). Manufacturers were targeted to ensure 10% of all new van registrations were zero emission last year, increasing to 16% this year, so there is still an incentive for manufacturers to keep the zero-emission momentum going.
The government says that the updated ZEV mandate increases flexibility for manufacturers to balance the annual targets. 22% of new car sales needed to be pure electric last year, with that figure rising to 28% this year. It also pointed out that making these changes would mean manufacturers could avoid fines by selling more battery electric vehicles (BEVs) in the later years of the mandate. These fines were originally set at £15,000 per car and from £18,000 per van, and these have been reduced to £12,000 and £15,000 respectively, with the Department for Transport (DfT) now expecting very few manufacturers to be fined. It will also extend the current ability to transfer non-ZEVs to ZEVs from 2024-26, out to 2029, giving additional flexibility to reward CO2 savings from hybrids.
Changes to the ZEV Mandate: What It Means For Fleets
The changes that have been announced focus on manufacturers, but they will be felt by fleet owners too. Critics argue that this could slow down and prolong fleets transition to EV. At Instatruck, we’ve been following fleet owners, especially HGV fleet owners’, attitude toward EV for some time. Progress was initially slow, and it was only following the 2015 VW dieselgate scandal that demand for electric vehicles took off with private buyers turning to EVs, while fleets, wary of range restrictions, shied away until the charging infrastructure was in place.
Recently, fleets have become the driving force in electric and hybrid vehicles. The Society of Motor Manufacturers and Traders (SMMT) latest figures state that 62.5% of EVs were registered by fleets in February 2025. Benefit-in-kind advantages for drivers, firms’ desire to decarbonise, and a dramatic increase in the number of charging points have all helped the transition. Key to it, though, has been the availability and practicality of models. So-called ‘range anxiety’, concerns over the distance that electric cars can travel on a single charge, has waned as cars can now cover as much as 400 miles, and that number is rising all the time. Increased production and choice have injected much-needed competition into the market, and that’s helped make them more competitive compared to their fossil-fuelled counterparts.
Electric Vehicles: An Innovation Slowdown?
Many are now concerned that there will be an innovation slowdown as manufacturers focus on selling more profitable diesel and hybrid vehicles rather than on electric vehicles. It’s easy to see why they would do this, particularly considering the 25% tariff on all imported cars that has been announced by the US government. That the industry needs help isn’t an issue, but such short-termism could have a knock-on effect on fleets and for all car buyers in the longer term. If manufacturers slow down on EVs, then we could see fewer on our roads, costs rise and a scramble to make up lost ground in a few years when the ban comes into force.
Of course, many fleet owners – especially smaller fleet owners – have welcomed the extensions. For those with a small fleet of say 2, 3, or 4 vehicles, changing them can be a significant business decision. If they know they can buy or lease cheaper traditionally fuelled vehicles for a few more years, then so much the better.
This is particularly important for HGV fleet owners. Electric trucks or eHGVs, as they are also known, are still relatively rare, are significantly more expensive and aren’t as well supported in terms of public charging points. Indeed, in the UK, there are only 5 public eHGV chargers as opposed to over 73,000 electric car charging points. Being able to wait for another few years before hauliers are forced to make the switch could prove vital, especially as by 2035 we should have clarity on the viability of hydrogen-fuelled trucks. The problem is that the truck industry is in desperate need of innovation and investment in electric trucks, having been extremely slow to get going, so again, this may be a case of short-term gain for long-term pain for HGV fleet owners.
Changes to the ZEV Mandate: What It Means For Fleet Insurance
These changes have raised a few eyebrows in fleet insurance circles. When electric vehicles first became popular, there was an expectation that they would lead to cheaper fleet insurance quotes as vehicles were said to be more reliable, safer, and easier to repair. This hasn’t happened mainly as insurers haven’t had enough experience with them to see what’s what. Will an exhausted battery mean that the car needs to be written off as it’s too expensive to replace, for example? The delay in the ban on sales of some vehicles will mean that it’s likely to be a while before they have sufficient evidence to work out what the risks are with electric fleets. This will push back the promise of cheaper fleet insurance quotes further and will give fleet owners another level of uncertainty.
Changes to the ZEV Mandate: Short-Term Relief But Long-Term Pain For Fleet Owners?
Clearly, there’s a lot to unpack here. In these troubled times, the government must support motor manufacturers in any way it can. The knock-on effects for fleets are potentially substantial, though, and come the early 2030s, we could see a scramble to get models into showrooms and EVs into fleets, which won’t be good for anyone. Time will tell…
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If you’d like more fleet insurance help or a fleet insurance quote, please contact Instatruck on 01332 320540. Our award-winning team of independent insurance brokers will be happy to give you all the help you need and provide you with a great value HGV, truck or fleet insurance quote.