Tech Beetle briefing GB

Tesla Warned UK Government Against Weakening EV Rules, Urged Support for Used EV Market

Essential brief

Key facts

Tesla warned that weakening the UK's zero-emission vehicle mandate could reduce electric car sales and hinder carbon reduction targets.

The company called for government support of the used electric vehicle market to help sustain EV adoption.

New UK policies, including a proposed pay-per-mile charge on EVs, risk undermining EV demand despite extended purchase grants.

Traditional automakers expressed concerns about profitability and investment under current EV rules, while Tesla and EV-focused brands support stricter regulations.

Tesla proposed banning plug-in hybrids with limited battery range after 2030 to accelerate full electric adoption.

Highlights

Tesla warned that weakening the UK's zero-emission vehicle mandate could reduce electric car sales and hinder carbon reduction targets.

The company called for government support of the used electric vehicle market to help sustain EV adoption.

New UK policies, including a proposed pay-per-mile charge on EVs, risk undermining EV demand despite extended purchase grants.

Traditional automakers expressed concerns about profitability and investment under current EV rules, while Tesla and EV-focused brands support stricter regulations.

Tesla, the US electric vehicle manufacturer led by Elon Musk, privately cautioned the UK government that diluting electric vehicle (EV) regulations could negatively impact battery electric vehicle (BEV) sales and jeopardize the country's carbon reduction targets.

Documents obtained from a government consultation earlier in 2025 reveal Tesla's concerns about proposed changes to the zero-emission vehicle (ZEV) mandate, which requires automakers to increase EV sales annually.

The Labour government had introduced loopholes allowing manufacturers to sell more petrol and diesel cars, raising alarms among EV proponents.

Tesla emphasized that introducing such "flexibilities" would suppress BEV supply and increase emissions, risking the UK missing its legally binding carbon budgets.

Alongside this, Tesla advocated for enhanced support for the used EV market, although it did not specify whether this included financial incentives.

This call comes amid broader industry debates, with traditional carmakers like BMW, Jaguar Land Rover, Nissan, and Toyota expressing that the mandate harms investment due to losses on EV sales.

Conversely, environmental groups and EV-focused brands argue the rules are effective and no fines have been issued for 2024 sales.

The UK Chancellor Rachel Reeves further complicated the landscape by proposing a "pay-per-mile" charge on electric cars starting in 2028, potentially reducing EV appeal compared to fossil-fuel vehicles, though she also extended grants for new EV purchases.

Other manufacturers such as Ford and Mercedes-Benz opposed stricter post-2030 emission targets, citing competitive pressures from Chinese manufacturers and criticizing reduced government support for EVs.

Mercedes-Benz suggested lowering VAT on public EV charging and considering price caps to encourage adoption.

Tesla additionally recommended banning plug-in hybrids with less than 100 miles of battery-only range after 2030, which would exclude many popular models.

These revelations highlight tensions between government policy, industry interests, and environmental goals as the UK navigates its EV transition.

Tesla, Ford, and Mercedes-Benz declined to comment further on the leaked submissions.

The documents were obtained through freedom of information requests despite some redactions and objections from the companies involved.