Prime Minister Sir Keir Starmer has announced a relaxation of key green policies in a bid to shield the UK automotive industry from the impact of President Donald Trump’s 25% tariffs on car exports to the United States.
Delivering his first formal response to the tariffs during a visit to the West Midlands, Starmer will say that British industry must accept that “the world has fundamentally changed” and adapt accordingly. He warned that the tariffs, part of Trump’s wider “Liberation Day” trade strategy, were “not a phase” and would require urgent long-term action.
One of the most significant changes is a relaxation of the UK’s Zero Emissions Vehicle (ZEV) mandate. The fine for non-compliance will be reduced from £15,000 to £12,000 per car, easing the burden on manufacturers already grappling with export barriers and inflationary pressures.
Under the current ZEV framework, 28% of all new cars sold in the UK this year must be electric, rising to 80% by 2030 and 100% by 2035. But Starmer confirmed that hybrid vehicles — including non-plug-in models — will be permitted until 2035, pushing back Labour’s previous commitment to end the sale of all new combustion engine vehicles by 2030.
Manufacturers will also be allowed more flexibility in how they meet annual EV targets. Instead of incurring fines or buying credits from fully electric competitors like Tesla or China’s BYD, they will now be able to “bank” and “borrow” EV sales across multiple years until 2030 to meet compliance requirements.
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