Conservatives to rip up electric vehicle rules and end petrol car ban to save the UK car industry

• Next Conservative Government will scrap mandate on manufacturers forcing them to produce a growing number of electric vehicles and end Labour's 2030 ban on petrol and diesel cars 
• Plans to end huge taxpayer subsidies currently used to prop up the mandate, saving taxpayers £3.8 billion 
• Make the UK car industry globally competitive again and deliver transition driven by innovation and demand not red tape 

Today [Monday 15^th November] the Conservatives are announcing their plans to scrap burdensome regulations and red tape on car manufacturers.  

The next Conservative Government will completely abolish the Zero Emission Vehicle (ZEV) mandate, ending the legal requirements on manufacturers to sell a fixed and rising percentage of electric vehicles each year. This would remove a rigid regulatory burden on car manufacturers that has meant their investment decision are dictated by Government policy rather than consumer demand. 

As well as removing this ZEV mandate, the Conservatives will also end the 2030 ban on new petrol and diesel cars in its entirety – unlocking freedom of choice for manufacturers and consumers alike and prioritising economic growth over arbitrary regulations. 

A future Conservative Government would also scrap all of the non-research & development subsidy programmes associated with the ZEV mandate. This would relieve manufacturers of more costly regulatory obligations and save the public finances £3.8 billion over the next decade. But we would retain infrastructure funding, as we support the continued development of the electric vehicle market.

The previous Conservative government recognised the immense pressure on the UK car industry when it delayed the ban on new petrol and diesel cars from 2030 to 2035 in 2023. Since then, the market has continued to demonstrate that the rigid deadlines imposed by the government are out of sync with how quickly consumers are willing or able to switch to electric. 

And Labour have moved sharply in the opposite direction. They reinstated the 2030 ban and confirmed that by 2035 every new car must be fully zero-emission. Their model relies heavily on subsidy, preferential tax treatment, and tight regulation to force both consumers and the car industry down a dead-end road. 

These schemes were designed to force consumer behaviour rather than fuel genuine innovation, but would have serious knock on consequences – with the OBR estimating that the fall in Fuel Duty, Vehicle Excise Duty, and similar climate-related revenues could reach £803 billion by 2050-51, with fuel duty alone falling by around £15.5 billion a year as petrol cars disappear from the roads.  

So, by allowing for a market demand-based transition, there would also be far less immediate pressure on the public finances.  

As Business Secretary, Kemi Badenoch attracted £20 billion of auto investment in 2023 - more investment into the UK car industry in one year in the job, than her predecessors did in seven years. These included TATA investing £4 billion in a new UK gigafactory in Somerset; BMW committing £600 million to build EV Minis in Oxfordshire; Stellantis investing £100 million in Ellesmere Port; and Nissan putting £2 billion into its Sunderland plant. 

But Labour's ideological adherence to the EV transition is having disastrous consequences for the UK car industry. Last year, Stellantis closed the Vauxhall Luton car plant, putting 1,100 jobs at risk, saying the ZEV mandate had partly driven its decision. Ford cut 800 UK jobs, blaming weak demand for electric cars. And the £600 million investment from BMW in its Oxford Mini plant secured by Kemi Badenoch in 2023 has now been put on hold. 

The ZEV mandate only exists because of the Climate Change Act and its 2050 net zero duty. 

Kemi Badenoch has already made clear that while the Conservatives support measures that genuinely help tackle climate change and preserve the environment, she has said Net Zero by 2050 is impossible. We have set out a series of common-sense policies that allow us to continue to protect the environment without subjecting our economy to arbitrary and self-imposed economic suicide.  

This includes ending all the burdensome mandates on North Sea Oil & Gas, repealing the Climate Change Act, and ending green levies like the Carbon Tax and Renewable Obligations Certificate to deliver 20% off electricity bills for consumers through our Cheap Power Plan.  

Kemi Badenoch MP, Leader of the Conservative Party, said: 

“Labour's rush to Net Zero is having a disastrous effect on the UK car industry.  

“The Conservatives will ensure that we protect the environment, but we will do so without forcing families to bear the brunt of the costs, and forcing car makers to meet deadlines that don't reflect consumer demand. 

“By scrapping the ZEV mandate and the ban on petrol cars we are putting fairness and common sense back into the system and saving money for taxpayers. Britain succeeds when we back business and support innovation - that's our plan for a stronger economy.”

Richard Holden MP, Shadow Secretary of State for Transport, said:

“Britain produces fantastic cars. But Labour's ideological decision to bring forward the mandate banning new petrol and diesels is hitting manufacturers at the worst possible moment.

“Costs are up, demand is down, and yet Labour is still accelerating towards targets that bear no relation to what people are choosing to buy. Labour's policy slams the brakes on British industry while leaving the path open for foreign firms to overtake them without facing the same rules or penalties.

“Scrapping the mandate and the billions in associated taxpayer subsidies will put Britain in pole position to respond to the market at a pace consumers are willing to move at.”

ENDS

Notes to Editors 

Repealing the Climate Change Act: 

• Following Kemi Badenoch's pledge that a future Conservative government would repeal the Climate Change Act and withdraw the UK's statutory commitment to achieve net zero by 2050, there are inevitable consequences for the Zero Emission Vehicle (ZEV) mandate, which is structurally dependent on that legislation (The Telegraph, ‘Kemi Badenoch: No more net zero – extract every drop of North Sea oil', 30 August 2025, link). As a policy tool designed to compel the automotive sector to meet net-zero targets fixed in law, the ZEV mandate cannot logically survive the removal of the framework that gives it purpose. Any serious reset of climate policy therefore necessitates reconsideration of the mandate itself. 

• The ZEV mandate sets out the percentage of new zero emission cars and vans manufacturers will be required to produce each year. ‘The zero-emission vehicle (ZEV) mandate sets out the percentage of new zero emission cars and vans manufacturers will be required to produce each year up to 2030. 80 per cent of new cars and 70 per cent of new vans sold in Great Britain will now be zero emission by 2030, increasing to 100 per cent by 2035' (Department for Transport, News Story, 3 January 2024, link). Exemptions for low and small-volume manufacturers such as Aston Martin, McLaren and Bentley have been granted only until 2035, after which they face a potential regulatory cliff edge with no clarity on their future status (Hansard, 7 April 2025, Vol. 765, 7 April 2025, link). 

• The previous Conservative Government took the pragmatic decision to delay the ban on new diesel and petrol cars from 2030 to 2035. The previous Prime Minister, Rishi Sunak, took the pragmatic decision to delay the ban on new diesel and petrol cars from 2030 to 2035, putting the UK in line with some other global economies such as France, Germany, Sweden and Canada. This allowed time for consumers to make the choice to switch to electric, and to level up our charging infrastructure (Department for Transport, News Story, 3 January 2024, link). Since then, however, there has been increasing recognition that consumer demand for electric vehicles has not developed at the pace expected and that transition timelines may require greater flexibility. 

• However, Labour made a manifesto commitment to restore the phase-out date of 2030 for new cars with internal combustion engines. ‘Labour will support the transition to electric vehicles by accelerating the roll out of charge points, giving certainty to manufacturers by restoring the phase-out date of 2030 for new cars with internal combustion engines' (The Labour Party, Manifesto 2024, p. 33, 13 June 2024, link). 

• Following a consultation, Labour announced that from 2030 all new cars must be hybridised in some manner and by 2035, all new cars and vans must be zero-emission. ‘This response finalises that intention, confirming that from 2030 all new cars will need to be hybridised in some manner – or be zero emission. From 2035, all new cars and vans will be zero emission, and everything we do must now support manufacturers in reaching that end point' (DfT, Consultation Outcome, 7 April 2025, link). 

• Company electric vehicles currently benefit from highly favourable Benefit-in-Kind (BiK) rates: 3% in 2025–26, rising gradually to 9% by 2029–30, compared with rates of up to 39% for petrol and diesel cars. This preferential treatment remains a key driver of fleet EV uptake, any sudden removal may risk significantly weakening demand and destabilising new vehicle sales at a time of already fragile market conditions. (Auto Express, ‘Electric car tax explained: how much will your EV cost you in tax?', 2 April 2025, link). 

The Government currently supports several schemes to promote EV adoption. Removing the ZEV mandate would enable these programmes to be scrapped, delivering substantial savings: 

• The Department for Transport claims that the Government is ‘investing £4.5 billion to turbocharge the switch to EVs'. ‘In total, the government is investing £4.5 billion to turbocharge the switch to EVs, securing Britain's position as a world-leader in electric vehicle adoption while helping put more money in people's pockets' (DfT, Press Release, 15 July 2025, link). Since then, the Government has announced further measures to support EV uptake, including an expansion of the Electric Car Grant at an average cost of £300 million per year between 2025–26 and 2029–30, representing an additional £1.2 billion of expenditure, alongside £200 million for charging infrastructure and deployment funding and a £500 million tax concession through the increased Expensive Car Supplement threshold for electric vehicles (OBR, Economic and Fiscal Outlook November 2025, 26 November 2025, link). This brings the effective total support envelope to approximately £6.4 billion. 

While no breakdown of this £6.4 billion figure has been provided, it includes: 

• £2.6 billion: Support for zero emission vehicle uptake. Following the Spending Review, the Government committed £1.4 billion to support the continued uptake of zero emission vehicles, including cars, vans and HGVs. This includes the £650 million Electric Car Grant to make new ZEVs more affordable for consumers, targeted schemes such as the Zero Emission HGV and Infrastructure Demonstrator (ZEHID), with up to £200 million allocated to deploy zero emission HGVs and associated infrastructure. (DfT, Written Parliamentary Question, UIN 74024, 4 September 2025, link and DfT, WPQ, UIN 83387, 28 October 2025, link). 

• £600 million: Charging Infrastructure. 
• £400 million: Infrastructure rollout. The Spending Review announced ‘£400 million to support the rollout of charging infrastructure' from 2026-27 to 2029-30 (HM Treasury, Spending Review 2025, 30 June 2025, link). 
• £200 million: Charging infrastructure and deployment. At the 2025 Budget, the Government committed an additional £200 million to support the rollout of electric vehicle charging, comprising £100 million for new charging infrastructure and a further £100 million in resource funding for local authorities and public bodies to assist with deployment and delivery (HM Treasury, Budget 2025, 26 November 2025, link). 

• £500 million: Luxury EV Car Tax Break (Expensive Car Supplement). The Government has increased the Expensive Car Supplement threshold for battery electric vehicles from £40,000 to £50,000 from April 2026, allowing more EV buyers to avoid the additional charge of £425 per year for five years. This measure, introduced to incentivise EV uptake and offset new mileage-based charges, is estimated to cost £0.5 billion in 2030–31 (OBR, Economic and Fiscal Outlook November 2025, 26 November 2025, link). 

• £2 billion: Research and development (R&D) funding. The previous Conservative Government's Battery Strategy pledged to ‘provide targeted support for zero emission vehicles, batteries, and their supply chains, including through over £2 billion of new capital and R&D funding for five years to 2030, building on the work of the Automotive Transformation Fund and the Advanced Propulsion Centre'. This funding was confirmed in the Autumn Budget, which promised ‘over £2 billion in R&D and Capital funding over 5 years to support the automotive sector' (DBT, UK Battery Strategy, 24 November 2023, link). This commitment was reiterated by the Labour Government in May 2025, confirming £2 billion of funding to 2030 to support R&D and the commercial scale-up of zero emission vehicle technologies and supply chains. (DfT, WPQ, UIN 53806, 22 May 2025, link). 

• The Shadow Ministerial Team does not propose scrapping this £2 billion R&D funding. Instead, it would be retained and strategically refocused towards next-generation automotive technologies where UK-led innovation can deliver genuine international competitive advantage and strengthen domestic manufacturing capability. 

• As a result, eliminating the ZEV mandate and its related non-R&D programmes could generate savings of £440 million in 2029–30 and £440 million annually over the following Parliament. With the expanded £6.4 billion envelope spread across 2025–2035 and £2 billion retained for R&D, approximately £4.4 billion remains in scope for cancellation. Spread evenly, this implies potential savings of £440 million per year across the ten-year period, including through 2030–31 to 2035–36 (WPQ, UIN 77166, 14 October 2025, link). 

Beyond the immediate fiscal benefits, ending the mandate – and slowing the transition to EVs – would also reduce the urgency of replacing lost Fuel Duty and Vehicle Exercise Duty (VED) revenues: 

• The most recent Fiscal Risks and Sustainability Report estimated the fiscal cost of climate change mitigation through 2050 at £803 billion, with around two-thirds stemming from lost revenues. ‘Our latest central estimate of the fiscal cost of climate change mitigation through to 2050- 51 is £803 billion (21 per cent of GDP), or £30 billion a year on average, of which two-thirds can be attributed to lost receipts (Chart 1.10). Expenditure accounts for the bulk of the fiscal cost in the next decade, particularly public investment in residential buildings, removals and surface transport. Receipts losses – mainly from lost fuel duty receipts – rise steadily over the projection period' (OBR, Fiscal risks and sustainability report, 8 July 2025, link). 

• The report estimated that revenue losses from declining consumption of hydrocarbons amount to £20.5 billion per year on average from 2024-25 to 2050-51. ‘In our central scenario, these revenue losses amount to £20.5 billion (0.5 per cent of GDP) per year on average between 2024-25 and 2050- 51. Of this, three-quarters comes from declining fuel taxes as petrol-driven cars are replaced by electric vehicles' (OBR, Fiscal risks and sustainability report, 8 July 2025, link). 

• Of this, approximately three-quarters – around £15.5 billion – comes from declining fuel taxes as electric vehicles (EVs) are adopted. ‘In our central scenario, these revenue losses amount to £20.5 billion (0.5 per cent of GDP) per year on average between 2024-25 and 2050- 51. Of this, three-quarters comes from declining fuel taxes as petrol-driven cars are replaced by electric vehicles' (CRD Analysis, 10 July 2025, available on request; OBR, Fiscal risks and sustainability report, 8 July 2025, link). 

• Furthermore, under current policy, the transition from internal combustion engine (ICE) vehicles to EVs is projected to reduce VED revenue by £500 million annually. ‘Vehicle excise duty (VED) is levied on the majority of vehicles using public roads in the UK. EVs were exempt from VED until the end of 2024-25. From April 2025, EVs are liable to pay VED, but at a lower rate in the first year. We estimate the switch from ICE vehicles to EVs to reduce VED receipts by £2.6 billion by 2050-51, which is 0.06 per cent of GDP (an average loss of £0.5 billion a year)' (OBR, Fiscal risks and sustainability report, 8 July 2025, link). 

• The Fiscal Risks and Sustainability Report noted the fiscal costs of the net zero transition can be lower if governments replace the lost revenues from Fuel Duty. ‘The fiscal cost of the net zero transition could be lower if governments chose to replace the lost revenues from fuel duty, for example through an alternative motoring tax, or if they chose to fund a lower share of the economy-wide investment path, for example through relying more on regulation to deliver the transition' (OBR, Fiscal risks and sustainability report, 8 July 2025, link). 

• This approach is consistent with the Conservative manifesto commitment not to introduce nationwide road pricing over the next Parliament. Scrapping the ZEV mandate and slowing the phase-out of internal combustion engine (ICE) vehicles would deliver two clear strategic benefits. First, it would sustain fuel duty revenues for longer, providing additional fiscal headroom and easing the short-term pressure to replace these receipts with new motoring taxes. Second, it would give the UK time to observe and assess the implementation of pay-per-mile and road pricing systems in other countries, strengthening future policy design and reducing the risk of significant public backlash. 

As Business Secretary, Kemi Badenoch attracted £20 billion of auto investment in 2023:

• Under the previous Conservative Government, the UK auto manufacturing sector received a £20 billion investment boost in 2023. The UK automotive industry attracted approximately £20 billion in private investment in 2023, according to calculations by the Society of Motor Manufacturers and Traders (SMMT) – meaning that 2023 saw more investment announced than in all the years back to 2016 combined (SMMT, 28 November 2023, link).

• Under the previous Conservative Government, the Tata group announced that it would invest £4 billion in a UK gigafactory which would create up to 4,000 jobs. In July 2023, the Tata group announced that it would invest £4 billion in a gigafactory that would create 4,000 new direct jobs, and thousands more in the wider supply chain. The gigafactory is set to provide almost half of the battery production needed by 2030 (DBT, Press Release, 19 July 2025, link).

• Under the previous Conservative Government, BMW EV announced a multi-million-pound investment in their Oxford MINI plant, bringing the total investment in the UK automotive sector to over £6 billion. BMW announced a multi-million-pound investment in their Oxford MINI plant, which will take investment in the UK automotive sector to over £6 billion (DBT, Press Release, 11 September 2023, link).

• Stellantis announced the start of electric vehicle production at Ellesmere Port. This would be the  UK's first EV-only manufacturing plant and is backed up by an £100 million investment (Stellantis, 7 September 2023, link).

• Under the previous Conservative Government, Nissan tripled investment in electric vehicle production in the UK. Nissan announced it was delivering up to £2 billion of new investment to produce two new electric vehicle models in Sunderland. Nissan have said their direct investment of up to £1.12 billion to produce the two models will enable wider investment in infrastructure projects and the supply chain, including a new gigafactory, bringing a total new investment today of up to £2 billion (Prime Minister's Office, 10 Downing Street, News story, 24 November 2023, link).