Tesla Warned UK Government that Looser EV Rules Would Undermine Battery Car Sales

Tesla privately cautioned the UK government that diluting electric vehicle regulations would depress demand for battery cars and jeopardise the country’s carbon reduction goals, according to documents released under freedom of information rules.

In submissions to a government consultation earlier this year, obtained by the Fast Charge newsletter, the US carmaker said that maintaining strict zero-emission vehicle (ZEV) targets was “essential” to sustaining electric car sales. It also urged ministers to provide “support for the used-car market,” although several pages of Tesla’s response were heavily redacted.

The Labour government in April introduced new flexibilities to the ZEV mandate, allowing manufacturers to sell a higher number of petrol and diesel vehicles. Critics said the change risked slowing the transition to cleaner transport. Additional taxes on electric cars announced in last week’s budget have also raised concerns about weakening demand.

Several manufacturers with UK plants, including BMW, Jaguar Land Rover, Nissan and Toyota, argued during the consultation that the ZEV mandate was discouraging investment, saying they were selling electric models at a loss. But environmental groups and EV-focused brands countered that the policy was working as intended, and no fines are thought to have been issued for 2024.

Tesla warned that introducing further loopholes would “suppress battery electric vehicle supply, carry a significant emissions impact and risk the UK missing its carbon budgets.” The chancellor, Rachel Reeves, added to industry unease by pledging a “pay-per-mile” charge for EVs from 2028. Although grants for new electric cars were extended, sector analysts said the mixed signals risk undermining confidence.

Tom Riley, author of Fast Charge, said the budget “pulled [the transition] in two directions at once,” and suggested ministers would bear responsibility if manufacturers press again for a weaker mandate.

Tesla, Mercedes-Benz and Ford initially objected to publication of their submissions. Ford and Mercedes used their responses to oppose tighter emissions limits after 2030, which would have required deeper cuts in average CO₂ output. Ford criticised European governments for reducing support for EV adoption and warned of intensified competition from lower-cost Chinese manufacturers with no UK production.

Mercedes also called for VAT on public charging to be cut from 20 per cent to 5 per cent, in line with domestic electricity rates, and suggested a price cap on charging costs. Tesla separately proposed prohibiting the sale of plug-in hybrids with an electric-only range below 100 miles after 2030, a threshold that would exclude many popular models.