Major carmakers told the government they were being forced into “unsustainable” price cuts on electric vehicles to meet sales targets, a key factor in their successful campaign to have the rules relaxed. The industry argued that while lower prices benefited consumers, they were crippling manufacturers’ financial health.
According to documents from a government consultation, automotive companies had overestimated public demand for battery-powered cars. To comply with the Zero Emission Vehicle (ZEV) mandate, which required selling a certain percentage of EVs, they had to offer significant discounts to attract buyers, thereby eroding profitability.
This financial pressure, they claimed, directly threatened their ability to make long-term investments in UK manufacturing facilities and research. Jaguar Land Rover stated the situation would “materially damage UK producers’ ability to invest,” a sentiment echoed across the industry.
The government accepted this line of reasoning and softened the mandate. However, critics argue this intervention disrupts a natural market correction. They believe the mandate was correctly forcing the industry to make EVs more affordable and accessible, and that relaxing the rules simply allows manufacturers to maintain higher prices on polluting petrol cars for longer.