Net Zero Rules: Deepening Electric Car Discounts

As the UK's zero-emission vehicle (ZEV) mandate targets continue to rise, electric vehicle (EV) manufacturers and dealers are facing increasing pressure to meet sales quotas. The result? Even deeper discounts on electric cars, putting profitability and sustainability at risk for car dealerships like Vertu Motors.

Vertu Motors, the UK's fourth-largest motor retailer, has already warned of the severe disruption caused by the ZEV mandate, with a subdued consumer environment and intense discounting leading to squeezed margins (Forrester, 2025). As the mandate targets increase from 22% in 2024 to 80% by 2030, manufacturers are likely to resort to even more aggressive pricing strategies to stimulate demand for EVs.



However, this discounting trend may have unintended consequences. Dealers like Vertu Motors are feeling the pinch, with increased pressure on new car volumes and margins. The market is becoming increasingly distorted in favor of battery electric vehicles (BEVs), making it more difficult for dealers to maintain profitability (Vertu Motors, 2025).

Moreover, the ongoing discounting trend could lead to market distortion, with consumers being encouraged to buy EVs not necessarily because they are the best choice for their needs, but because they are the cheapest option. This could potentially lead to a backlash if consumers feel they have been misled or if the EVs they purchase do not meet their expectations (Auto Trader, 2025).

To alleviate some of these concerns, the UK government launched a consultation in December 2024 to consider changes to the ZEV mandate, such as allowing car makers to count sales of electric vans towards their car quotas, and vice versa. While these flexibilities could help manufacturers meet their targets more easily, they might also encourage a shift in focus away from passenger cars, potentially slowing down the adoption of electric cars.

In conclusion, the increasing ZEV mandate targets in the UK are likely to lead to even deeper discounts on electric cars, putting profitability and sustainability at risk for car dealerships. While the government's proposed flexibilities in the ZEV mandate could help manufacturers meet their targets more easily, they might also have unintended consequences on market dynamics and consumer behavior. It is crucial for the government to carefully consider these factors and engage with stakeholders to ensure that any changes to the ZEV mandate support the broader goal of reducing greenhouse gas emissions while minimizing negative market impacts.

References:
Forrester, R. (2025). Vertu Motors warns of increasing pressure on new car volumes and margins due to ZEV mandate. [Online] Available from:
Auto Trader. (2025). Discounts of more than £10,000 per car in many cases. [Online] Available from: