Labour will relax electric car Zero Emission Vehicle (ZEV) Mandate rules and ban petrol and diesel models by 2030 as part of measures to counter new tariffs from the United States. Sir Keir Starmer confirmed more flexibility with some major benefits handed to British brands. Combustion vans will also be allowed on UK roads until 2035, while fines for manufacturers found to be breaking strict emissions targets will fall by £3,000

Meanwhile, small and micro-volume manufacturers such as British supercar brands McLaren and Aston Martin will be exempt from the mandate targets. Labour said this would help preserve some of the UK car industry’s most iconic jewels for years to come.

The new rules will also allow hybrid cars, such as the Toyota Prius and Nissan e-Power – to be sold until 2035. But, the policies have officially confirmed the sale of petrol and diesel cars will come to an end by 2030.

Announcing the new rules on Sunday evening, The Prime Minister said: “Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change.

“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.”

The move comes after U.S. President Donald Trump imposed a 25% tariff on all foreign car imports globally. Other updates will allow firms to extend the current ability to borrow in 2024-26, enabling repayment through to 2030;

The current ability to transfer non-ZEVs to ZEVs from 2024-26 will be extended until 2029. Officials state this will give significant additional flexibility to reward CO2 savings from hybrids.

A new flexibility allowing for van to car transfer will also be introduced allowing firms to earn ZEV credits for van sales and vice versa. Companies can used to be fined up to £15,000 for any petrol or diesel cars produced over the ZEV threshold but this will now fall to £12,000.

Firms can purchase credits to avoid fines but the new measures could make it easier for brands to avoid being caught out. Labour said their plan will increase the flexibility of the mandate for manufacturers up to 2030 so more cars can be sold.

The Government claims this will help ease the transition to zero-emission models and give industry more time to prepare for the future.

Mr Starmer added: “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. And it will boost growth that puts money in working people’s pockets, the first priority of our Plan for Change.”