Government relaxes EV mandate in response to Trump’s 25% tariffs

The British government has relaxed demands on UK automakers to switch to production of electric vehicles. The move is a bid to soften the impact of swingeing tariffs imposed by US President Donald Trump.

The move was welcomed by industry leaders, but there are already calls for greater support for the industry.

The Government said the 2030 phase-out date for new petrol and diesel cars would not change. But under the new plan, it will allow full hybrid and plugin hybrid vehicles to be sold until 2035. £2.3 billion has also been allocated to boost manufacturing of zero-emission vehicles and assist people in switching to electric vehicles.

The new measures include a reduction in fines car manufacturers must pay if they cannot comply with EV sales targets. EVs accounted for 19% of UK sales in March, well short of the 28% that carmakers would have needed to achieve in 2025 to meet the government’s EV mandate.

The new announcement also includes an exemption for low-volume manufacturers including Aston Martin, Bentley and McLaren.

Mike Hawes, head of UK auto industry group SMMT, said: “The government has rightly listened to industry, responded quickly to global dynamics and recognised the intense pressure manufacturers are under. Industry remains committed to decarbonising road transport but the ZEV Mandate targets are incredibly challenging, especially with a paucity of consumer demand and geopolitical upheaval.”

But he said more needed to be done: “Growing EV demand to the levels needed still requires equally bold fiscal incentives, however, to give motorists full confidence to switch. Given the potentially severe headwinds facing manufacturers following the introduction of US tariffs, greater action will almost certainly be needed to safeguard our industry’s competitiveness.”

AA president Edmund King said the announcements were a pragmatic step forward. “The inclusion of hybrids can act as a stepping stone to help those not yet ready to make the full switch to electric,” he said.

“Our consistent message to government is more needs to be done to make EVs accessible for everyone. Generally, drivers are hesitant, but most are not hostile to the change. Help is needed to stimulate demand for EVs including broader fiscal incentives. Drivers still raise concerns about cost of purchase, cost of charging and availability of chargers.”

Adrian Fielden-Gray, COO of national EV charging network Be.EV, called for greater spending on consumer incentives, not just manufacturer bailouts. “Today’s news is yet another example of there being too much ‘stick’ and not enough ‘carrot’ when it comes to EVs. The Government keeps thinking about car manufacturers, but they need to instead focus on incentives for drivers making the switch to electric.”

He continued: “Drivers have lost the home charging grant, purchasing grants, and most recently the exemption on VED. At a time where people are hesitating to switch, focus should be put on incentives and helping the making the transition to electric easier than ever.”

Trump imposed a 25% tariff on all cars imported to the US on April 3, a move which has been roundly slammed, and which has prompted a global stock market crash on fears of a global trade war. The move is likely to drive up US car prices, as few low-cost cars are built in the US.

The US accounts for 16.9% of UK car exports, making it the UK car industry’s second-largest export market after the EU (which takes 54% of UK exports). More than 1 million British-made cars worth about £7.6bn were shipped to the US last year. But in the wake of Trump’s tariffs, Jaguar Land Rover has announced it was pausing car shipments to the US for a month to consider how to mitigate the costs of the tariffs. It is estimated that Range Rovers sold in the US could see prices rise by almost $30,000.

The Institute for Public Policy Research (IPPR) said Trump’s tariffs could put up to 25,000 UK jobs at risk, putting “extreme pressure” on Britain’s car makers.

The European Commission set out plans to soften its rules earlier this month, giving automakers three years, rather than one, to comply with CO2 emissions targets for cars and vans.

Sue Robinson, CEO of car dealer trade body NFDA, called for the UK to align with the EU. “The electric vehicle targets remain in place and the fines still remain too high for manufacturers. The UK remains the most aggressive regime for the EV transition and we would want the UK Government to align with the rest of Europe, in order to make our market as competitive as possible in a rapidly changing global marketplace.”