Key Insights

The UK Labour government has officially confirmed the 2030 ban on new petrol and diesel car sales, with hybrids allowed until 2035, providing clarity on their manifesto commitment.
A £2.3 billion investment package will boost manufacturing of zero-emission vehicles and help people make the switch to electric vehicles.
The updated Zero Emissions Vehicle (ZEV) Mandate offers increased flexibility for manufacturers while maintaining the core 2030 target, including extended borrowing provisions and new credit transfer systems.
Small and micro-volume manufacturers like McLaren and Aston Martin will be exempt from the 2030 phase-out, preserving iconic British brands.
Affordability remains a key consideration, with drivers able to save over £1,000 annually by charging overnight at home compared to petrol vehicles.

The future of UK transport has been definitively set on a greener path, with the Labour government officially confirming the reinstatement of the 2030 ban on new petrol and diesel cars. This marks a significant commitment not just to environmental goals, but to positioning the UK as a leader in the global transition to sustainable transportation. The announcement, made on April 6, 2025, provides the certainty that manufacturers and consumers have been seeking.

In September 2023, the previous Conservative government had pushed back the deadline from 2030 to 2035. The Labour government has now reverted to the original timeline, but with important nuances - hybrid vehicles will be permitted until 2035, offering a transitional period for both industry and consumers.

Transport Secretary Heidi Alexander stated: "We will always back British business. In the face of global economic challenges and stifled by a lack of certainty and direction for too long, our automotive industry deserves clarity, ambition and leadership. That is exactly what we are delivering today."

At The Electric Car Scheme, we understand that everyone wants to contribute to a Net Zero future. People are limited by information, access, price and complexity - all of which are slowing down progress globally. The confirmation of the 2030 ICE ban with clear details is a significant step in the right direction, especially because of how well salary sacrifice schemes work for electric cars.

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What Does The Ban Mean For Drivers in the UK?

For drivers, the 2030 deadline means that anyone looking to buy a new conventional petrol or diesel car will need to do so before that date. However, hybrids will remain an option until 2035, providing a transitional option for those not yet ready to go fully electric.

Electric vehicles are becoming increasingly affordable and accessible. Half of used electric cars are now sold at under £20,000, and 29 brand new electric cars are available from under £30,000. Additionally, the running costs of an electric car are significantly lower than those of fueling a petrol or diesel vehicle, with drivers able to save £1,100 a year compared to petrol if they charge overnight at home.

Our research shows that for the majority of Brits (68%), affordability remains the biggest barrier to getting into an EV. The government's commitment to continue tax breaks worth hundreds of millions of pounds to help people switch to electric vehicles will help address this concern.

We previously analysed what we call "Electric Car Day" - the day when a petrol driver has spent more on fuel than an electric car driver will spend all year. Last year, it was on July 15th. We estimated £1,268 in annual fuel costs for petrol drivers traveling 7,400 miles yearly, compared to £680 for electric car drivers. Depending on your EV model and when you charge it, this crossover point could come even earlier.

At The Electric Car Scheme, we strive to make the transition to an electric car easier and more affordable than ever. We launched our used electric car salary sacrifice offering to allow employees to save 20-50% on the already subsidised price of a used EV. These vehicles are also available for fast delivery, and there is a wide selection of used electric cars to choose from. This offers a fantastic opportunity to get into an EV, making it the most budget-friendly option!

What About The Fuel Tax Subsidy?

Fuel tax has been frozen since 2011, at an estimated total cost to the treasury of £66 billion, keeping fuel cheaper and carbon dioxide production high.

Transport is the UK’s number 1 emitter of the greenhouse gas, making this a costly, unhealthy and environmentally damaging policy. The government could help plug the funding gap that has been a key message over the past month or so by getting rid of this freeze. Not to mention the cost to the NHS of poor air quality and extra funding freed up by ending this subsidy. Introducing a levee on aviation fuel would also increase the tax take and help tackle climate change.

The question around fuel tax is yet to be addressed.

Industrial Strategy Support

The ZEV Mandate changes will be backed by a modern Industrial Strategy, to be published in full this spring, which will help British businesses realise the potential of industries of the future. Prime Minister Keir Starmer emphasised this commitment:

"I am determined to back British brilliance. Now more than ever UK businesses and working people need a government that steps up, not stands aside. That means action, not words. So today I am announcing bold changes to the way we support our car industry. This will help ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence, as well as back with pride."

A Commitment to a Greener Future

At The Electric Car Scheme, we believe that clarity around around the UK Government’s plan towards cleaner transport is a positive step to accelerating the journey to Net Zero.

Here’s what CEO and Co-Founder at The Electric Car Scheme, Thom Groot thinks of the reinstatement date: