The sale of new petrol and diesel cars will be banned from 2030, with plug-in hybrids phased out from 2035. That means the future of the automotive industry in the UK is most definitely electric.
Between now and then, the sales of electric vehicles will gradually increase each year, following a trajectory that started around 10 years ago.
The mandatory 2030 legislation is just one of the policies that have been introduced over time to incentivise electric vehicles, with support levels varying as EV adoption has increased.
UK electric car sales in 2025
The UK remains one of the biggest in terms of global car sales – in fact it was the biggest EV market in Europe in 2024.
There are now over 1.5 million EVs on UK roads, with many bought over the past decade with the help of the plug-in vehicle grant that was officially ended in 2022.
In 2024, electric accounted for 1 in 5 new cars (or 19.6%) sold. That’s a market share that has continued into 2025, with around 20% of new cars registered so far power by electric.
While trending in a positive direction, EV sales are not quite climbing at the rate required to meet targets set out by the government to support the transition.
That’s known as the Zero Emission Vehicle (ZEV) mandate.
The ZEV mandate explained
The ZEV mandate is a policy introduced by the UK government designed to boost the number of electric vehicles on the road and eventually achieve 100% fully electric new car sales.
The ZEV mandate dictates the percentage of cars sold by manufacturers that must be zero-emission vehicles each year. Below outlines the targets for the next five years. Those failing to meet the standards face hefty fines, putting the onus on car makers to convince consumers to make EV purchases.
- 2024: 22%
- 2025: 28%
- 2026: 33%
- 2027: 38%
- 2028: 52%
You’ll notice that 2024 was the first year of the ZEV mandate rules and with just 19.6% of EVs sold last year, the industry fell short of the target. However, the system allows for flexibility and motor manufacturers to ‘borrow’ credits from future years to avoid fines and 2025 shows the share is trending towards a positive 2025.
Other nuances to the rules include the small volume manufacturer exemption. Brands such as McLaren or Aston Martin don’t have to meet the same targets and can continue to push the boundaries of automotive technology.
The ZEV mandate now also allows hybrid vehicles to continue to be sold until 2035, while petrol and diesel vans with internal combustion engines will still be on the market until 2035 to allow for a gradual fleet shift.
Electric car tax changes explained
In contradiction to the ZEV mandate which seeks to drive the electric transition, the government has taken away tax breaks for electric vehicles.
As of 1 April 2025, owners of electric vehicles now pay vehicle tax for the first time – with the £0 tax band being removed completely. Plus, EVs costing over £40,000 are subject to the extra Expensive Car Supplement.
New electric vehicles registered after 1 April 2025 will pay the lowest first year rate of vehicle tax at £10. In year two, they’ll pay the standard £195. The car tax changes also impact plug-in hybrid electric vehicles (PHEVs), which will no longer have reduced vehicle excise duty rates compared to petrol or diesel vehicles.
Electric vehicles were previously exempt from the Expensive Car Supplement but now face an extra £425 a year surcharge for zero emission vehicles that cost over £40,000 and are registered after 1 April 2025.
The Expensive Car Supplement kicks in after the first year, so electric car drivers pay the lower £10 rate in year one, followed by £620 in year two to six of ownership (that’s the standard rate plus surcharge).
Home charging grants
Just as the plug-in vehicle grant to purchase new EVs was removed in 2022, so too was the Electric Vehicle Homecharge Scheme (EVHS), which provided support for up to 75% towards the cost of installing home charge points.
Since then, it’s been replaced by a new scheme called the EV Chargepoint Grant. The new EV Chargepoint Grant is very similar to the old EVHS grant system in that it also gives you up to 75% (up to £350) off the cost of a home charger installation.
However, the new scheme no longer applies to people who own a house. The EV Chargepoint Grant is only available to people who own flats, or those who rent their accommodation.
VAT on public charging
With support withdrawn for consumers buying electric cars and charging at home, there is also limited government policy in place to support charging infrastructure.
Although announcing a £200 million investment for public charging between 2025 and 2026, this funding has been allocated to local authorities to support on-street charging projects across England.
A key policy that industry experts would like to see introduced is a reduction on VAT for electricity sold through the public charging network.
Zapmap calculated that electric vehicle drivers will spend an extra £85m on UK tax when using public car chargers this year because of a disparity in VAT rates.
Home users of electricity pay just 5% VAT compared with the 20% rate that applies to businesses – including electric car charger operators. That means that people charging a car using public chargers face higher costs which could in turn slow down the EV transition.
A study by GRIDSERVE found that half of non-EV drivers would go electric sooner if public charging had the same 5% VAT as home charging.
Amending the Renewable Transport Fuel Obligation (RTFO)
The UK policy on electricity under the Renewable Transport Fuel Obligation (RTFO) is hindering the installation of EV charging stations and therefore slowing down the EV transition.
That’s according to the charging industry which wants the clean EV energy to be eligible for credits in the same way biofuels are for oil companies.
While the UK continues to exclude electricity, the EU is reforming its own Renewable Energy Directive (RED) that governs how the EU will achieve its 2030 and 2050 climate goals.
The new EU policies will mean charge point operators (CPO) in all EU countries can claim credits for the clean energy it sells to EV customers, therefore making EV charging an attractive investment opportunity, reducing the need for government support to install charging infrastructure and accelerating the opening of new public charging points.
The eCredits policy has been in place in the Netherlands and Germany since 2015 and 2017, respectively and its success is evident in the statistics – around 50% of all charging points in the EU are concentrated in these two nations. Meanwhile, France, which introduced eCredits in 2022 has seen a huge increase in CPO investment over the last two years.
Advances in battery technology
Beyond government policy and charging infrastructure rollout, the advanced technologies in electric vehicles will also continue to change over time.
The new electric cars that will go on sale over the next five to 10 years will have bigger and better batteries, in turn giving EV drivers longer ranges and faster charging. Range anxiety, which is already an increasingly reduced issue, will become a complete non-argument.
That’s thanks to 800v battery technology that will replace the 400v system in most electric vehicles today.
Some high-end vehicles like the Porsche Taycan already utilise the system to achieve mind-blowing charging speeds, but as the EV technology becomes cheaper, mainstream models will start to deploy the technological advancements, too.
In the further future is the introduction of solid-state battery technology. This cutting-edge technology would replace the lithium-ion EV batteries used today and bring even more range but with reduced weight.
The role of hydrogen cars
Any discussion of the future of electric vehicles must include the role that hydrogen may play. It remains a niche technology with just a handful of refuelling stations in the UK.
And while the process of refuelling a hydrogen car is similar to a petrol or diesel, traditional fuel stations can’t be easily converted into hydrogen filling stations. In fact, hydrogen is incredibly difficult to store and transport.
With that in mind, it’s unlikely we’ll see hydrogen cars (also known as fuel cell electric vehicles – or FCEVs) become a core part of the future of motoring. However, there may be a role for the technology to play in heavy goods vehicles.
