Labour Confirms 2030 Petrol and Diesel Car Ban with Updated ZEV Mandate
Key insights:
The UK Labour government has officially confirmed the 2030 ban on new petrol and diesel car sales, with hybrids allowed until 2035, providing clarity on their manifesto commitment.
A £2.3 billion investment package will boost manufacturing of zero-emission vehicles and help people make the switch to electric vehicles.
The updated Zero Emissions Vehicle (ZEV) Mandate offers increased flexibility for manufacturers while maintaining the core 2030 target, including extended borrowing provisions and new credit transfer systems.
Small and micro-volume manufacturers like McLaren and Aston Martin will be exempt from the 2030 phase-out, preserving iconic British brands.
Affordability remains a key consideration, with drivers able to save over £1,000 annually by charging overnight at home compared to petrol vehicles.
The future of UK transport has been definitively set on a greener path, with the Labour government officially confirming the reinstatement of the 2030 ban on new petrol and diesel cars. This marks a significant commitment not just to environmental goals, but to positioning the UK as a leader in the global transition to sustainable transportation. The announcement, made on April 6, 2025, provides the certainty that manufacturers and consumers have been seeking.
In September 2023, the previous Conservative government had pushed back the deadline from 2030 to 2035. The Labour government has now reverted to the original timeline, but with important nuances - hybrid vehicles will be permitted until 2035, offering a transitional period for both industry and consumers.
Transport Secretary Heidi Alexander stated: "We will always back British business. In the face of global economic challenges and stifled by a lack of certainty and direction for too long, our automotive industry deserves clarity, ambition and leadership. That is exactly what we are delivering today."
At The Electric Car Scheme, we understand that everyone wants to contribute to a Net Zero future. People are limited by information, access, price and complexity - all of which are slowing down progress globally. The confirmation of the 2030 ICE ban with clear details is a significant step in the right direction, especially because of how well salary sacrifice schemes work for electric cars.
In this blog, we’ll explore what the 2030 deadline means, how it could shift public behaviour, and its implications for UK companies supporting their employees on the path to Net Zero.
The Importance of the ICE Ban
The ICE phase-out is more than just a date on a calendar; it’s a crucial milestone in the UK’s journey towards Net Zero. By setting this deadline, the government is sending a clear message: the future of transport is electric and the switch needs to happen sooner rather than later. This move will accelerate the adoption of EVs, encourage investment in charging infrastructure, and drive innovation in battery technology.
“We will always back British business. In the face of global economic challenges and stifled by a lack of certainty and direction for too long, our automotive industry deserves clarity, ambition and leadership. That is exactly what we are delivering today.”
It will come as no surprise that petrol and diesel cars are one of the largest emitters in the UK, with the average petrol car producing 164 grams of CO2 per kilometre and diesel cars producing 170 grams of CO2/km. Under the current Labour Government, this policy will revert from 2035 to 2030, the original plan. This is great news, as it will help the UK meet Net Zero targets and significantly shape the future of travel in the country.
This policy change signals that it’s time to start planning for a future without ICE vehicles, with the 2030 deadline offering a clear timeline for making the switch. The most affordable way to transition to an electric car is through EV salary sacrifice - an employee benefit that all companies can offer. This allows employees to save significantly on Income Tax and National Insurance by paying from their pre-tax salary.
What Does Labour’s 2030 Plan Include?
The government has now provided specific details about the implementation of the 2030 ban:
New petrol and diesel cars will not be sold after 2030
Hybrid cars (like the Toyota Prius and Nissan e-Power) can continue to be sold until 2035
Vans with internal combustion engines can also be sold until 2035, alongside full hybrids and plug-in hybrid vans
Small and micro-volume manufacturers (including luxury brands like McLaren and Aston Martin) will be exempt from the 2030 phase-out
This approach balances environmental ambition with practical considerations for industry adaptation and consumer needs.
What the Confirmation Means for the UK’s EV Market
With the confirmation of the 2030 phase-out, we can expect continued strong growth in the UK's EV market, which is already thriving. The UK was the largest EV market in Europe in 2024 and the third largest globally, with over 382,000 EVs sold – up a fifth on 2023.
This announcement provides the certainty that manufacturers need for product lifecycle planning. Matt Galvin, UK Managing Director of Swedish EV brand Polestar, previously said: "What vehicle manufacturers need is certainty to support product lifecycle planning."
The £2.3 billion investment package announced alongside the mandate changes will further accelerate the transition by boosting British manufacturing of zero-emission vehicles and improving charging infrastructure. There are now more than 75,000 public chargepoints in the UK – with one added every 29 minutes – ensuring that motorists are always a short drive from a socket.
“What vehicle manufacturers need is certainty to support product lifecycle planning. While we welcome a faster transition to zero tailpipe emissions, combating poor air quality and delivering on the UK climate change ambitions, it requires an urgent focus on the imbalance between incentives to stimulate private consumer demand and penalties for the manufacturers. ”
What Does This Mean for The ZEV Mandate?
The ZEV (Zero Emissions Vehicle) Mandate was introduced in January 2024 and was designed to aid the transition between the UK’s new car and van markets to zero emissions by 2035. The Zero Emissions Vehicle (ZEV) Mandate has been significantly updated to provide greater flexibility while maintaining the core commitment to the 2030 phase-out date.
Maintaining the existing phase-out dates and headline trajectories for cars and vans
Extending the current ability to borrow in 2024-26, enabling repayment through to 2030
Extending the ability to transfer non-ZEVs to ZEVs credits from 2024-26 out to 2029, giving significant additional flexibility to reward CO2 savings from hybrids (with caps to ensure credibility)
Introducing a new flexibility by allowing for van-to-car transfer: 1 car credit can be exchanged for 0.4 van credits, and 1 van credit can be exchanged for 2.0 car credits
These changes address many of the concerns previously expressed by manufacturers about the feasibility of meeting strict targets within the original timeframe.
What Does The Ban Mean For Drivers in the UK?
For drivers, the 2030 deadline means that anyone looking to buy a new conventional petrol or diesel car will need to do so before that date. However, hybrids will remain an option until 2035, providing a transitional option for those not yet ready to go fully electric.
Electric vehicles are becoming increasingly affordable and accessible. Half of used electric cars are now sold at under £20,000, and 29 brand new electric cars are available from under £30,000. Additionally, the running costs of an electric car are significantly lower than those of fueling a petrol or diesel vehicle, with drivers able to save £1,100 a year compared to petrol if they charge overnight at home.
Our research shows that for the majority of Brits (68%), affordability remains the biggest barrier to getting into an EV. The government's commitment to continue tax breaks worth hundreds of millions of pounds to help people switch to electric vehicles will help address this concern.
We previously analysed what we call "Electric Car Day" - the day when a petrol driver has spent more on fuel than an electric car driver will spend all year. Last year, it was on July 15th. We estimated £1,268 in annual fuel costs for petrol drivers traveling 7,400 miles yearly, compared to £680 for electric car drivers. Depending on your EV model and when you charge it, this crossover point could come even earlier.
At The Electric Car Scheme, we strive to make the transition to an electric car easier and more affordable than ever. We launched our used electric car salary sacrifice offering to allow employees to save 20-50% on the already subsidised price of a used EV. These vehicles are also available for fast delivery, and there is a wide selection of used electric cars to choose from. This offers a fantastic opportunity to get into an EV, making it the most budget-friendly option!
What About The Fuel Tax Subsidy?
Fuel tax has been frozen since 2011, at an estimated total cost to the treasury of £66 billion, keeping fuel cheaper and carbon dioxide production high.
Transport is the UK’s number 1 emitter of the greenhouse gas, making this a costly, unhealthy and environmentally damaging policy. The government could help plug the funding gap that has been a key message over the past month or so by getting rid of this freeze. Not to mention the cost to the NHS of poor air quality and extra funding freed up by ending this subsidy. Introducing a levee on aviation fuel would also increase the tax take and help tackle climate change.
The question around fuel tax is yet to be addressed.
Industrial Strategy Support
The ZEV Mandate changes will be backed by a modern Industrial Strategy, to be published in full this spring, which will help British businesses realise the potential of industries of the future. Prime Minister Keir Starmer emphasised this commitment:
"I am determined to back British brilliance. Now more than ever UK businesses and working people need a government that steps up, not stands aside. That means action, not words. So today I am announcing bold changes to the way we support our car industry. This will help ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence, as well as back with pride."
A Commitment to a Greener Future
At The Electric Car Scheme, we believe that clarity around around the UK Government’s plan towards cleaner transport is a positive step to accelerating the journey to Net Zero.
Here’s what CEO and Co-Founder at The Electric Car Scheme, Thom Groot thinks of the reinstatement date:
"The reinstatement of the 2030 deadline for 100% zero-emission vehicle sales is welcome news to achieve Net Zero, but more will need to be done to ensure that it is a realistic target, not just an empty promise."
The 2030 phase-out is a critical step in the right direction, and it’s up to all of us - government, businesses, and individuals - to ensure it’s successful. By embracing electric vehicles, we’re not just reducing emissions; we’re also driving innovation, creating jobs, and building a sustainable future.
Looking Ahead to the Future
As we move towards 2030, there's a lot to be excited about. The electric vehicle market is booming, with the UK established as Europe's largest EV market. With clear government direction and support, we're confident that the UK can achieve its Net Zero goals while creating economic opportunities.
At The Electric Car Scheme, we're here to help businesses navigate this transition, offering solutions that make going electric easier than ever through our salary sacrifice schemes for both new and used electric vehicles. These can save employees 20-50% on the already subsidised price of an EV, making it the most budget-friendly option to join the electric revolution.
If you want to learn more about The Electric Car Scheme and how it could work for your company, browse our available cars or book a call!
Last updated: 04/09/2024
