The government has announced significant changes to its Zero Emission Vehicle (ZEV) Mandate in response to global economic uncertainties and potential tariff impacts on the automotive sector.
Prime Minister Keir Starmer unveiled the package of reforms yesterday, confirming the 2030 phase-out date for new petrol and diesel car sales while introducing greater flexibility for manufacturers. 
The changes include allowing hybrid vehicles to remain on sale until 2035 and exempting small-volume manufacturers like McLaren and Aston Martin from the mandate targets.
The announcement comes at a critical time for the British automotive industry, following the implementation of a 25% tariff on all foreign vehicles entering the US market last Thursday.
Adding to these challenges, British exporters faced a further blow on Saturday when an additional 10% levy on all UK goods entering America took effect, contributing to global market instability.
"Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change," said Starmer.
"I am determined to back British brilliance. Now more than ever UK businesses and working people need a government that steps up, not stands aside," he added.
The updated ZEV Mandate introduces several technical changes designed to ease pressure on manufacturers.
Crucially, while maintaining the headline trajectories for cars and vans, the DfT said it offers increased flexibility in how companies can meet their targets.
Manufacturers will now be able to borrow credits from 2024-2026 with an extended repayment period through to 2030, giving them more time to scale up production as demand increases.
Another significant modification allows manufacturers to transfer credits between lower-emission hybrids and zero-emission vehicles until 2029, with appropriate caps to maintain credibility.
This effectively rewards companies for CO2 savings achieved through hybrid technology while they transition to full electric production.
Additionally, a new cross-category flexibility permits the transfer of credits between cars and vans, with one car credit exchangeable for 0.4 van credits, and one van credit worth 2.0 car credits.
The government explicitly stated that "support for the car industry will be kept under review as the impact of new tariffs become clear."
Transport Secretary Heidi Alexander emphasised that the changes would "protect and create jobs – making the UK a global automotive leader in the switch to EVs."
The government points to growing consumer demand, noting that March sales were up over 40% compared to last year.
The DfT also announced £2.3 billion in government spending to boost manufacturing of zero-emission vehicles and improve charging infrastructure.
Currently, a new public chargepoint is added every 29 minutes, with the UK now hosting more than 75,000 public charging points.
The full Modern Industrial Strategy, which will incorporate these automotive sector changes, is set to be published later this spring.