What does the ZEV mandate mean if I’m looking to order a new car or van this summer ?

We’re now almost the halfway point of 2024 and the automotive industry continues to evolve and adapt to its surroundings, both at home here in the UK and worldwide influences.

Aside from economic factors one of the key considerations in the UK this year is the Zero-Emissions Vehicles (‘ZEV’) mandate that became law back at the beginning of January 2024.  

Although the date for the banning of the sale of new petrol and diesel cars was moved to 2035 last autumn, the ZEV mandate is still very much alive for both new cars and commercial vehicles (sub-3.5tonnes) As a result this has set some very challenging targets for manufacturers.

ZEV mandate has created demanding targets

In short, 22% of all their cars and 10% of all their vans registered in 2024 must be zero emissions vehicles. This is no issue for the likes of Tesla or Polestar, but it is more of an issue for established manufacturers transitioning their ranges.

These targets continue to rise each year and the fines are significant! Manufacturers can secure “credits” towards these numbers based on the overall emissions of their registrations, but even with these considered, manufacturers will be managing and monitoring volumes carefully over the coming months.

Pure electric clearly doesn’t work for everyone, even more so where commercial vehicles are concerned. The need for manufacturers to achieve these targets is creating activity in the marketplace that anyone looking to renew, replace or add a vehicle during the second half of this year should be aware of.

Throughout the second of this year manufacturers will be balancing production, incentives and deliveries to ensure they don’t have to pay the huge fines that will be levied in the event of failure.

The car and van market in 2024

What does it mean therefore if we’re in the market to order a new vehicle in the second half of 2024?

Car market:

• Stocks of electric vehicles are rising. This generally making it quicker to take delivery of your new vehicle and leading to improved offers and incentives.
• Pricing: Much has been spoken previously about EV pricing, but we are now seeing the first signs of “price parity” between petrol / diesel cars and their electric counterparts initially through finance offers
• Lead Times: Estimated lead times for selected petrol and diesel models are showing the first signs of being extended into 2025, as manufacturers balance their needs and volumes towards the end of this year.

Commercial vehicle market.

• Adoption of electric commercial vehicles is much more complex and considered for business. The latest generation of electric vans with longer ranges and quicker charge time will assist in policy changes. Also, the expected changes to permitted gross vehicle weight for EV vans to take into account their heavier unladen weight.
• The cost barrier is being reduced as discounts and incentives have increased significantly in line with stock levels.
• Selected manufacturers are warning customers of potential delays to diesel / petrol vans scheduled for the second half of this year as they monitor and manage their numbers.
• Similarly selected manufacturers are also including a minimum mix of 10% electric order volumes when discussing support terms

What do I do ?

Regardless of whether you are looking at pure EV’s or petrol / diesel vehicles it’s worth being aware of the situation, and one that will continue to develop across the second half of this year.

If you’re in the market for a new EV, either car or commercial, then it is generally all good news with increased discounts, new models coming to market and shortened lead times. One potential sting in the tail might be the value of your current EV, (if you have one and are part-exchanging) as used values have reduced quite markedly since last autumn. If you haven’t already it might be worth considering either a PCP or contract hire to provide future RV protection.

If petrol or diesel or hybrid or plug-in remain your preferred choice it would be worth starting your discussions sooner rather than later, and get your order in, This is because most manufacturers (not all unfortunately) are price protecting their products, so the price today is the price you pay. You may also be in for a bit of a wait depending on how well your chosen manufacturer is doing against their targets!

If you can be flexible on specification there are still good volumes of petrol / diesel cars around. The specification is of course fixed so there may be a compromise or two but you do get to beat the wait!

Levels of pre-registered and special offer vehicles

Higher stock levels are also increasing the number of vehicles being pre-registered or sold in batches to leasing companies for special offer leasing deals. A pre-registered vehicle will have another “owner” on the V5, but this is becoming less of an issue unless you are also looking to sell or dispose of the vehicle relatively quickly (within 12 months).

Three owners in its first year does impact a vehicles value and desirability.  Aside from this there are potential savings to made with a pre-registered vehicle and of course it is physical and ready to go almost immediately.

Leasing company special offers are becoming more widespread, and most are focussing on electric vehicles as manufacturers look to reduce stocks and build zero emission registrations. Be careful though, the campaigns can be very short lived.

Help with our vehicle requirements in 2024

Whatever your potential requirements for the rest of 2024 – help is on hand – we’re here to talk through your considerations, ideas or objectives in terms of your next new vehicle – whether for you personally or for your business. We can advise on lead times and when best to order … have access to a wide network of stock, pipeline and factory allocations, together with pre-registered vehicles and leasing company special offers.

Similarly, if you’re not sure whether full electric is for you, we’ll happily share our thoughts and experiences based on our ten years of running EV, PHEV, petrol and diesel vehicles across our business and managing those in our customers businesses.

Start your conversation and new vehicle journey today by calling us on 01473 372020 or emailing us getintouch@tysoncooper.com to arrange a call back at a time convenient for you.