ZEV Mandate to hit new car sales for five years
The ZEV Mandate will have a negative impact on new car sales for at least five years, according to new analysis from Cap HPI.
It believes new registrations will flatline in the next two years before actually falling from 2027 onwards to reach a level even lower than the 1.62 million sold during Covid-struck 2020.
Forecast strategy chief Dylan Setterfield said: “We don’t think we’ll get to the two million market the SMMT is predicting for 2025. Reading further forward, we think we flatten off in 2026 before overall reductions in new car sales from 2027 onwards with petrol and diesel models increasingly discontinued.
“Of course, all this is assuming we don’t get material changes to the targets and the structure of the ZEV mandate, but by the time we get to 2029 we think we’re going to be marginally below the Covid-affected year of 2020.”
Cap HPI is predicting 1.988m sales this year, which is 1.8% up on last year but still 14% down on 2019, with sales down below 1.6 million by 2029.
Based on these projections, vehicle manufacturers will need to sell more than 550,000 electric cars next year to meet the 28% sales targets. The percentage rises to 38% in 2027 and 52% in 2028, which Setterfield believes is not achieveable.
He said: “It’s hard to see how you can achieve that in a natural market, especially since by that stage of the adoption curve, we’re going to have to start moving into the segment of the population that are unable to charge at home.
“2028 could be a crucial year, but maybe the powers that be recognise by 2027 that it’s not going to work in its current format. They can either change the plan. They can try a carrot instead of a stick, or maybe they double down and they tax petrol and diesel cars to high heaven. Either way, it’s really hard to see how this is going to work in its current form.”
