If your business runs a van, the government’s van mandate review means the rules on how fast you must switch to electric are about to be renegotiated, and that matters for anyone planning a fleet upgrade in the next two years, and it’s worth checking the new vehicle and asset funding options for SMEs before committing to new stock.
The SMMT has said the van mandate review of the Zero Emission Vehicle (ZEV) Mandate “must bring a deliverable outcome”, arguing that current targets were built on assumptions about energy prices, charging infrastructure and demand that have not held up. The trade body made the case in a statement published alongside its latest new van registration figures for July, and it lands as government has brought its review of the mandate forward.
The numbers behind the call are striking. Battery electric van registrations rose by almost three-quarters in July, taking market share to a record 14.7% and pushing year-to-date growth into double digits for the first time in 2026. That momentum is already showing up in fleet conversions like Electra’s repowering of 26 refuse trucks for Sussex councils. Overall van demand also grew, up around a fifth in July and 4.3% for the year so far, after a weak first half.
But even a record year-to-date BEV share of 10.6% is less than half this year’s mandated target of 24%. Next year’s target of 34% is further out of reach still, with the government’s end goal remaining 100% zero-emission new van sales by 2035.
SMMT points out that industry has not stood still. More than 40 zero-emission van models are now on sale in the UK, and operators are also finding cheaper routes in, such as retrofitting existing diesel fleets with electric drivetrains, covering nearly two-thirds of all van models available, and government schemes including the Plug-in Van Grant have supported almost 115,000 registrations since 2012. Additional support, such as the Depot Charging Scheme and the electric van driver derogation, has also helped.
The problem, according to SMMT, is that fleet operators are being asked to hit targets the market cannot yet support. Higher upfront costs, patchy charging infrastructure and practical worries about payload and range, concerns tackled directly by Electra’s diesel-to-electric fleet conversions, are colliding with the thin operating margins typical in logistics, making the mandated pace of transition hard to sustain for many businesses, particularly where asset finance for new vehicles is already tightly stretched.
What this means for small fleet operators
For SME hauliers, tradespeople and delivery firms, this review is worth watching rather than acting on immediately, though retrofit projects such as Electra’s refuse truck electrification programme show one route to lower-cost compliance. Nothing changes to the mandate today, but the trajectory to 2035 is now genuinely up for negotiation, which could shift the timeline for when your business is expected to switch.
Firms already stretched by tight margins may recognise the pressure SMMT describes. It echoes the wider cash flow squeeze covered in our look at why the UK’s biggest firms are the worst payers, where thin margins leave little room for big capital decisions like fleet electrification.
Businesses moving goods across borders should also keep an eye on how any change to van rules interacts with other cost pressures, including the new EU customs rules for 2026 that small importers already need to check. And with many employers already in the cautious mode described in our piece on the low-hire, low-fire climate, few will want to commit to expensive vehicle purchases before the rules are settled.
What to do next
If you are planning a fleet replacement, hold off on locking in purchase or lease decisions purely to hit the current mandate targets until the review’s outcome is published. It is worth checking whether existing support such as the Plug-in Van Grant still applies to any vehicle you are considering, and factoring realistic charging access, not just list-price incentives, into the decision.
