Government targets for manufacturers to sell a certain proportion of electric vehicles (EVs) is starting to impact car and van orders for fleets.

The zero emission vehicle (ZEV) mandate, which came into force this year, requires more than a fifth (22%) of cars and 10% of vans sold by manufacturers to be electric.

The targets for manufacturers increase each year, requiring 80% of new cars and 70% of new vans sold in Great Britain to be zero emission by 2030, increasing to 100% by 2035.  

The uptake of new fully electric cars in February rose 21.8% to account for 17.7% of registrations, an improvement on last year’s 16.5%, but still shy of the 22% target.

Duncan Webb, fleet director at the AA, believes that, with new 2024-plate registrations in March, the car industry will be back on track to hit the required 22% zero-emission car rate within the next few months.

He also does not expect that in order to hit that figure, manufacturers will introduce any sort of tactical pricing. However, he told Fleet News at 10: “If you're doing bulk orders, though, there certainly seems to be an attempt to try and link the number of ICE (internal combustion engine vehicles) to the number of alternative fuel (vehicles) you order.

“I think that’s a tactic that is very much coming into play in terms of bulk ordering in the market.”

Chris Connors, ISS head of fleet and travel for the UK and Ireland, agreed. He said: “There is an incentive to take a higher percentage of electric vehicles.

“Ultimately, the OEMs have got to achieve their targets, they want to avoid the penalties and they want to avoid the reputational risk.

“They either do it by selling more EVs or selling less ICE vehicles or a combination of both.”

However, he said: “We’ve got a shared objective... we want more EVs on fleet.

“One of the barriers for getting them on fleet is the affordability – the TCO (total cost of ownership) calculation. If the manufacturers can help us get that TCO closer, then it gives us more incentive and then we can commit to more.”

Alan Bastey, customer service director at Zenith, said that there has been some pressure on buyers to ensure orders have a proportional number of EVs.

He explained that, while EVs are getting a little bit cheaper, with some incentives, ICE is being restricted or becoming more expensive.

“That is going to be a real challenge for people,” he said. “That ICE vehicle could be a premium product going forward.”

Zero emission van target ‘a concern’

February saw a decline in registrations of battery electric vans weighing up to 3.5 tonnes, falling by 119 units to 847 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).  

That equated to a 4.7% market share, down from 5.5%, and a significant shortfall in the 10% figure required by manufacturers this year.  

Webb is concerned about the 10% zero-emission target for new vans. He highlights how the rolling 12-month average for new vans registered in the UK is around 340,000, but just 20,000 of those will typically be fully electric. 

He said: “That needs to be 34,000 to hit the target and I don’t see that if I'm being honest just now.”

As a result, Webb expects to see some sort of reaction in the van market as manufacturers target the 10% zero-emission market share demanded by the ZEV mandate.

“I'm not sure exactly how it’s going to pan out,” he told Fleet News at 10. “Hopefully, it could be a massive price reduction on EV.

“It could be a withdrawal of product and availability though, to get to the target - you can get to the target in various ways.”

He added: “I’m nervous about what the reaction of the van market, especially in the next three months, is going to be.”

To watch the discussion around the impact of the ZEV mandate on Fleet News at 10, click on the video below.

The Government has been criticised for failing to offer fleets the urgent fiscal support required to replace diesel vans with electric light commercial vehicles (LCVs). 

Last month, a new campaign, headed by the British Vehicle Rental and Leasing Association (BVRLA), was launched to help accelerate the uptake of zero-emission vans.

The Zero Emission Van Plan has brought together Association of Fleet Professionals (AFP), Logistics UK, Recharge UK and EV Café to call on the Government to provide greater fiscal support, improve charging infrastructure and remove regulatory barriers. Fleet News has also joined the campaign.

However, the Budget failed to offer any measures to help drive the uptake of electric vans or cars.

The next Fleet News at 10 takes place on Friday (March 22) from 10-11am. To register, click here.