Analysing the UK's EV landscape in 2025

The ZEV mandate revolution: reshaping Britain's roads

The UK ZEV mandate is starting to work in the second half of the 2024 as new car registrations approach the requirements. To achieve this, car manufacturers are following two strategies: restricting sales of combustion cars and offering discounts on electric vehicles. As a result, October sales reached 20.7% (from 15.6% in 2023) while yearly BEV sales are creeping up to 18.1%. Because Plug-ins and HEVs count as partial BEVs, and over-achieving manufacturers can trade ZEV credits with under-achieving ones; it means the mandate will be met.

The mandate for 2025 is more ambitious than for 2024, requiring 28% of ZEV instead of 22%, a rise of 6% over 2024. Thanks to momentum for the UK EV market; and the extra year manufacturers will have for ZEV implementation, they will be able to meet it, though at a cost of further restricting combustion car sales and providing more cost incentives. It means that for the first time, unelectrified and mild hybrid Diesel + Petrol cars will fall below 50% of the market share (currently 60%), as there will be a positive knock-on effect on Plug-in hybrids (PHEVs) and Plugless hybrids (HEVs).

Vans enter the ZEV mandate for 2025, set at 16% of the market. At October's sales levels this means a doubling of the market share, but at current annual sales, more than 200% growth. For fleet sales BEV vans are likely to reach a tipping point, due to the overwhelming economic advantage of running them, but it might not happen yet: manufacturers might simply tolerate the fines.

Busses on the other hand, don't have a ZEV mandate, but are already making serious inroads into cities and towns, with 2024 sales attaining 20% of the market. UK Councils have common objectives to clean up their localities and the savings made by ZEV busses are compelling. We can expect a further transitional shift to perhaps 30% in 2025. The minibus market however, will continue to struggle due to priorities on rural funding.

EVs for everyone: breaking down the barriers

The EV market in 2025 will become more accessible thanks to cheaper Chinese cars; discounts from ZEV mandates; a broadening of salary-sacrifice as a means of paying for EVs and the growth in the second-user market.

EVs have reached about 2.7% of the second-user market, a Year on Year growth of 57%. Compared with the new EV market share at about 18%, it looks like the second-user market share is woefully under-represented. But this isn't correct. If we consider them being on sale 3-4 years after they were new (which is the average ownership) & compare with UK registrations as a whole, it amounts to about 2x the market share of new EVs (1.2%) in 2021.

Debunking the EV myths: the truth campaign

We can expect the UK government to throw £millions at reducing EV misinformation, ranging from tyre pollution, to fires to being too heavy for car parks and bridges, or that batteries die quickly, or you need to drive 40,000km before an EV pollutes less than a combustion car.

Beating misinformation will provide a return on investment of at least 10:1, i.e. £1m would likely bring in more than £10m extra sales (over 200 EVs at current averages prices).

The charging revolution: power to the people

Charging infrastructure in the UK has been accelerating in the past year following a Government review of charging in 2023. It's grown by 33%, with most of that happening in the more expensive rapid charger space. It's likely that with the renewed impetus in the UK EV market and the need to bring EV ownership to inner-city drivers and those with off-street charging, charging infrastructure growth will be maintained into 2026.

Supersmart AC Chargers are likely to appear in 2025, making use of the DC charging protocol (ISO 15118) to provide plug-and-go destination charging with optimal load balancing. These kinds of features, for example, provided by the Versinetic ISO 15118 AC charger, look set to revolutionise public charging with an effortless & frustration-free charging experience.

Battery tech breakthroughs: powering the EV revolution

We can continue to expect rapid changes to battery technology in 2025. The first Solid-State batteries are expected in an MG vehicle and the BMW "Neue Klasse" sometime in 2025. Battery prices are set to fall $90/kWh by 2025. CATL plan to launch their second-generation Sodium Ion batteries (which function as low as -40ºC) in 2025, bringing cheaper EVs to the market while improving energy density to 200Wh/kg (BYD Sodium-ion batteries are also close to commercialisation). Meanwhile LFP batteries are set to break the 300Wh/kg barrier.

A major insight into battery development follows. While fossil fuels are tightly targeted to their drive-train (e.g. petrol vs diesel); EV drive-trains don't fundamentally care what the underlying battery is, because all electrons are compatible and Battery Management Software can handle different charging requirements. Thus, the sheer breadth of battery chemistries & architectures beyond traditional, high-performance Li-ion, NMC cells ensure an abundant future for EVs & battery storage in general in a wide range of markets.

Micro-EVs, such as the £17K Microlino, the relatively successful £8K Citroën AMI as well as newcomers like the Mobilize Duo & Bento will continue to sound out micromobility options. Long-range vehicles are starting to break the 640km barrier; while BYD is busting out into the eLCV and eHGV market.

At the micromobility end, e-scooters are likely to be legalised and face significant regulation to ensure safety for owners and other travellers.

Made in Britain: the UK's EV manufacturing renaissance

In 2024 manufacturers have been unsuccessfully pushing back against the ZEV mandate. We can expect that to be continued in 2025 to similar effect, the UK government may offer tweaks to ensure the industry can meet the targets.

Car manufacturing in the UK is being threatened with closure again in 2024 (such as the Vauxhall plant): we can expect the UK government to offer financial incentives to maintain and if possible grow the market. What financial incentives are likely? Most likely, direct subsidies, but also collaborations with Chinese EV manufacturers, giving them a greater foothold in UK manufacturing in return for jobs; more competitive EVs and technology sharing with existing automotives.

Global EV outlook: a world in electric transition

The Plug-in EV transition is expected to continue around the world, reaching 85 million in 2025, a growth of over 30% with 61 million being BEVs. This won't be evenly spread: China and Europe are expected to provide the bulk of this; while the US, after reaching 10% will face headwinds, with the possible exception of California. Europe will significantly move forward as ZEV rules mandate 28% EV sales in 2025 while EU CO2 rules tighten leading to 2.7m new EVs vs 1.9m EVs today. Still the EU is having to navigate the cost of living crisis, from the Covid pandemic and Geopolitical shocks in 2022.

V2G trials are being performed in the UK and Australia. Asia will continue with a rollout of mostly two-wheel and three-wheel, cost-effective electric vehicles.