Which Car Brands are Best Positioned for the ZEV Mandate?

The ZEV mandate, which requires car makers in the UK to have at least 22% of their sales as electric cars, has finally come into effect. However, not all car makers are in the same position to meet this requirement.

Leading the Way

Data from Automotive Services International (ASI) on new-car registrations up until October 2023 reveals that only a few traditional car makers have already surpassed the 22% threshold. These car makers include Mercedes-Benz and the BMW Group.

In the third quarter of 2023, both Mercedes-Benz and BMW Group exceeded the 22% share well ahead of schedule. Mercedes-Benz even reached close to 30%. This demonstrates their strong commitment to electric vehicle (EV) sales.

Challenges for Mainstream Brands

While premium brands like Volvo are making progress towards the 22% target, mainstream brands are struggling to convince buyers to switch to electric during the current cost of living crisis. The Volkswagen Group, for example, currently sits at a 15% share of EV sales, still far from the target.

Stellantis, which lacks a premium brand like Audi, BMW, or Mercedes, saw its proportion of EV sales drop below 10% in Q3. However, there are indications that some brands, like Vauxhall, Peugeot, and Citroën, may be holding back EV registrations until 2024 to count towards the ZEV mandate.

Future Plans and Strategies

Stellantis has stated its intention to comply with the ZEV mandate in 2024 without paying fines or buying credits from other car makers. Kia’s EV sales have fluctuated throughout the year, but it is expected to make progress towards the target in the coming months.

Toyota, which has seen low sales for its first EV, the bZ4X, is banking on future EV models to meet the requirements. Ford has confirmed that it will defer compliance to future years when new models like the Explorer are available.

Other car makers like Renault and Nissan are also likely to follow a similar deferral path as they work on developing new EV models to support a 22% market share.

The Complex Path to Compliance

Each car maker faces unique circumstances and challenges in meeting the 22% target. The ASI data highlights the complexity of selling cars in the UK under the ZEV mandate. It is clear that there is no one fixed way for car makers to achieve compliance.

As the industry navigates this new landscape, it will be interesting to see how car makers adapt their strategies and offerings to meet the growing demand for electric vehicles.