Major car brands face huge £12,000 fine per vehicle for not meeting Labour's strict EV targets

It outlines that manufacturers must have a minimum percentage of total car and van sales be zero emission ahead of the ban on new petrol and diesel vehicles.

From 2030, the sale of new vehicles with internal combustion engines will be banned, while only electric vehicles can be sold after 2035.

Labour confirmed that it would be moving forward with its pledge to ban the sale of new petrol and diesel vehicles by 2030, although hybrids will still be on sale after this date.

The ZEV mandate states that 28 per cent of a manufacturer's total car sales must be electric by the end of the year, while van sales are set at 16 per cent.

These vehicle registration targets will continue to increase until the end of the decade, when rates will reach 80 per cent for cars and 70 per cent for vans.

Although manufacturers are able to buy and sell credits to help them meet these production targets, they could also be hit with expensive charges.

READ MORE: Volkswagen announces huge price cuts to popular models as 20,000 Britons use Electric Car Grant

Compliance payments are levied on automakers that do not meet their targets after utilising trading of credits and other flexibilities.

At the end of 2024, manufacturers faced a charge of £15,000 per car and £9,000 per van if they did not meet minimum requirements outlined in the ZEV mandate.

However, automakers could face heftier charges this year, with Labour confirming that manufacturers can be charged £12,000 per car and £15,000 per van.

Some of the largest automotive companies in the world could also be hit with a CO2 standard charge of £86 per gram of CO2 missed.

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Certain manufacturers will remain exempt from the targets included in the ZEV mandate.

This includes "micro volume" manufacturers who make under 1,000 cars or vans a year. These companies automatically receive a zero per cent target.

Small volume manufacturers who sell under 2,500 cars or vans may apply for a derogation to receive a zero per cent target. However, they will need to demonstrate a decarbonisation plan.

It comes as the Government continues to push electric vehicles, with the £650million Electric Car Grant helping motorists save thousands of pounds off the price of a new EV.

There are more than 35 eligible vehicles that can receive the ECG, with most attracting a £1,500 discount and two models - the Ford Puma Gen-E and Ford E-Tourneo Courier - eligible for a £3,750 discount.

Labour has confirmed that more than 20,000 drivers have already taken advantage of the Electric Car Grant, with September seeing near-record EV sales.

Commenting on the initial success of the incentive scheme, Transport Secretary Heidi Alexander said the Government was supporting the EV industry and helping cut costs for motorists.

"Our discounts have sparked a surge in electric car sales, making them cheaper and within reach of more households than ever before," she added.