A to ZEV; What fleet managers need to know about the Zero Emission Vehicle mandate

A challenging and complicated market for Fleet Managers

Paul Coley is a Principal Consultant at Lex Autolease with more than 20 years’ experience in the fleet sector. He specialises in employee reward schemes and consults on a wide variety of corporate benefit programmes, working with clients to create bespoke practical solutions for their needs.

It’s no exaggeration to say that this is probably the most challenging and complicated market for fleet managers that I have ever seen.

Staying on top of all the different factors that are impacting on fleet sustainability and affordability is hard work, and one key consideration must be the Zero Emission Vehicle (ZEV) mandate.

Simply, ZEV is the government’s roadmap to phase out petrol and diesel cars. The mandate is aimed at vehicle manufacturers, who must sell an ever-increasing percentage of EVs every year, until they hit 100% in 2035.

They face fines if they don’t meet annual EV sales milestones along the way, with a target of 33% of cars and 24% of vans in 2026.

The way the ZEV rules are applied will continue to shape the market and influence fleet managers’ decision-making for years to come.

Rules and results

The mandate came into force in 2024, however, manufacturers did not hit their targets that year, despite many handing out generous discounts in a bid to boost sales. In April 2025, the government relaxed the rules, saying it won’t issue fines for missing EV sales targets until 2030.

As a result, there are fewer manufacturer discounts available, and EV sales appear to be falling even further behind the government’s annual targets (6% off the 2025 target, compared to 2% off the 2024 target*). Despite this, fleets are continuing to lead EV adoption, tax incentives and organisational environmental policies have been key drivers.

How to stay ahead

For fleet managers this all makes having a consistent company car policy a challenge. Ensuring all employees can enjoy the same benefits, whilst also enabling their organisations to stay on track with their sustainability goals, can be a balancing act. The key to successfully navigating the current landscape is to build strong relationships with your leasing partner and vehicle manufacturers.

Businesses and fleets register the majority of new cars (65%)*, and manufacturers understand that if a particular model is made unavailable by employers, they stand to lose sales. Talk to either your leasing company or the manufacturer to establish whether they’re willing to offer additional discounts to help keep the vehicle affordable for your employees. 

Another important consideration is evolving government policy. The announcement of a mileage-based tax for electric and plug-in hybrid vehicles, set to begin in April 2028 will have a significant impact. This tax will directly affect whole-life costs for EVs, making accurate mileage forecasting and cost modelling essential for fleet managers. To offset the potential impact of the tax on EV adoption, the Government has expanded the Electric Car Grant and raised the Expensive Car Supplement threshold for EVs from £40,000 to £50,000 in April 2026. 

As we move closer to 2035, the incentives designed to encourage EV ownership are likely to be phased out. It’s particularly important to keep up to date with current incentives and government policy. 

It all adds up to a challenging and constantly evolving situation for those working to maximise tax efficiency, achieve best value and deliver on sustainability goals, while also providing the best possible benefit package for employees. While the landscape is complex, there’s still plenty of opportunity for businesses willing to embrace the challenge. The transition to EVs isn’t a one-size-fits-all journey, it depends on each organisation’s appetite, priorities and pace of change. While we can’t make those decisions on your behalf, we can provide insight and guidance around the wider ESG and sustainability considerations to help you make informed choices. 

If you’d like to explore this further, then get in touch as we’re here to support you in navigating the road ahead.

*Source: The Society of Motor Manufacturers and Traders (SMMT)