EV Grant Uncertainty Creates Compliance Headwinds for UK Car Manufacturers

The automobile industry faces mounting challenges as confusion surrounding the electric car grant scheme potentially threatens manufacturers’ ability to meet the government’s electric vehicle mandate requirements this year.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), has expressed serious concerns about the lack of transparency regarding model eligibility for the grant scheme. This uncertainty has significantly hampered manufacturers’ capacity to develop effective strategic planning for crucial sales periods.

The manufacturing sector’s predicament is particularly acute as companies must forecast sales months in advance to ensure compliance with the UK’s electric vehicle mandate whilst managing imports and marketing strategies. “They’re operating in a fog,” Hawes emphasised, highlighting how manufacturers’ carefully calculated market positioning could be undermined by unexpected competitive price advantages.

The mandate’s stringent requirements dictate that manufacturers must achieve at least 28 per cent green vehicle sales this year, escalating to 80 per cent by 2030. The industry’s anxiety is heightened by the government’s failure to consult manufacturers before announcing the grant scheme earlier this month.

Recent data reveals an 11.9 per cent decline in car and commercial vehicle manufacturing during the first half of 2025, attributed to global trade disruption and economic uncertainty. Despite this overall downturn, electrified car production demonstrated resilience with a 1.8 per cent increase to 160,107 units, representing a record 41.5 per cent share of UK production.

The critical details regarding model eligibility for the electric car grant are scheduled for release on August 11, leaving manufacturers in a state of prolonged uncertainty during a pivotal transition period for the automotive industry.