Zero emission vehicle transition by 2035 now law

Company Cars, News,

The amended Government target for all new cars and vans being zero emission by 2035 became law on the 3rd January 2024.

The press release marking the new law comments that the UK now has the most ambitious regulatory framework for the switch to electric vehicles of any country in the world. It’s expected that the legal requirement for the switch will help the car industry and manufacturers, as they’ll have certainty and be able to safeguard jobs.

The ban on new diesel and petrol cars was originally set to come into force in 2030, but was pushed back to 2035 in September 2023. There were various reasons given at the time, including availability of new electric cars, high costs, concerns about practicality from small businesses, and a lack of nationwide charging infrastructure.

The postponement reduced the pressure for businesses and consumers, but increased uncertainty for businesses and investors involved in electric cars and the related technology. By making the mandate law it appears the Government says it is demonstrating its commitment.

In addition to setting the end date, the zero emission vehicle mandate also specifies the percentage of new zero emission cars and vans that manufacturers will have to produce each year up until 2030. The mandate requires that 80% of new cars and 70% of new vans sold in Great Britain be zero emission by 2030. This will then increase to 100% by 2035.

The UK’s charging network is still growing, and will need to continue to do so. Government reports state that there are now over 50,000 public chargepoints across the country, a 44% increase on this time last year. The target is 300,000 chargepoints by 2030, though their distribution needs to be more widespread. Investment in the infrastructure that will be needed is said to be on the way.

Businesses may benefit by considering the new mandate when reviewing company car and van purchases in future. There are currently tax advantages to having an electric vehicle as a company car with reduced benefit in kind costs, although these need to be weighed against the potentially higher purchase costs. 

Remember too there is a plug-in van grant of up to £2,500 for small vans and £5,000 for large vans available at least until 2025 that can help offset the cost of transition. You can see the guidance on the grant here: Plug-in Van Grant guidance.

If you’d like our help with assessing the costs and tax on electric vehicles, please get in touch. It’s a subject that will become increasingly relevant as we draw closer to the new deadline.

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