- Not an Absolute Requirement: The 28% target for 2025 is not compulsory.
- Fines Misunderstood: There are rumors of a £15,000 fine per excess internal combustion engine (ICE) car, but the reality is more nuanced.
At the heart of the ZEV mandate is the Vehicle Emissions Trading Scheme (VETS), which allows for:
- Credit Trading: Manufacturers who fall below their ZEV threshold can buy credits from those who exceed it.
- Commercial Dynamics: If demand for ICE cars increases, so does the credit price, and vice versa.
- Fines As a Cap: The £15,000 is the maximum amount a manufacturer pays if they decide not to engage in trading, serving as a cap rather than a standard fine.
- Manufacturer Strategies: Most manufacturers aim to meet their ZEV targets to avoid negative publicity, viewing the cost of credit purchases as a commercial opportunity instead of an obligation.
- Credit Prices: Currently low, credit prices fluctuate based on demand for ICE cars and ZEV targets.
- Flexibility for Manufacturers: There are flexibilities, such as borrowing credits and derogations for smaller manufacturers.
- Beyond Cars: While fuel-cell cars are considered ZEVs, they are unlikely to become widespread at present. A similar scheme applies to vans with lower ZEV targets, where hydrogen might play a role.
Contrary to popular belief, the ZEV mandate does not force all new cars to be zero-emission. Instead, the market's natural equilibrium will likely reduce electric vehicle prices, as the ZEV mandate is structured around the "polluter pays" principle.
