The UK’s Zero Emission Vehicle (ZEV) Mandate is reshaping the automotive landscape. After its first year in 2024 and a busy 2025, the target for 2026 now steps up and requires 33% or one in three new car registrations to be zero emissions. The mandate uses a credit-and-allowance system to ensure automotive OEMs steadily increase their zero emission mix toward 80% of cars by 2030 and 100% by 2035.
In this blog we’ll take a look at the latest 2026 targets, the challenges for automotive retailers, and how a car benefit solution suitable for all fuel types can help your business with the transition to electric.
The 2026 ZEV mandate targets
This year, 33% of new registrations must be ZEVs, which is up from 28% in 2025 and 22% in 2024. This target matters because in 2025, Battery Electric Vehicles (BEVs) reached around 23.4% market share (a record high) yet still fell short of the 28% target.
This has led many in the industry to call for a rethink on the mandate’s pace and the support available for consumers. It really shows how much we need clearer demand signals, better affordability, and joined‑up retail strategies as we approach the tougher 2026 target.
In the month of March, when we see the first new registration plate of the year, the scene could be set for the remainder of the year, so it will be interested to see the registration figures at the end of March.
What this means for automotive retailers
1) Inventory planning
As an automotive retailer (timing may vary), you’ll be asked to register and sell a higher proportion of EVs to align with quarterly OEM targets. You could be required to pivot stock mix (models, trims, price points) to match local demand. By using a CBS car scheme as a registration channel, you can be in full control of your used EV pipeline, but this does require planning, so it would be a good idea to get ahead, if you can.
2) Affordability
With EV prices and public charging costs still being major factors for some retail customers, being able to offer an EV as an employee benefit could be a game-changer.
Offering EVs to your drivers can make them savings on income tax and National Insurance Contributions (NICs). As a business you can also make some NICs savings, which reduces the pressure on relying solely on OEM discounts to make new EVs affordable.
If you need to run EVs for your company car drivers, you can simply add EVs to your current CBS scheme and it could be the quickest win you’ll make this year.
3) Education and confidence
Confidence is still reliant on the basics such as charging access, range clarity. Offering EVs as part of a CBS car scheme can give some peace of mind to your drivers, as if you’re able to provide charging access at work, or contribute towards public charging, this could reduce charging anxiety.
Equipping your drivers with first-hand knowledge of EVs could also help to give sales confidence when the car returns and needs to be sold to a retail customer.
Blended car benefit solutions: a practical bridge to the ZEV target
A blended car‑benefit approach helps make EVs more affordable, cuts tax costs, and supports your green goals. Two options that can really help in the ZEV era are salary sacrifice – giving employees cheaper access to EVs – and Employee Car Ownership Schemes (ECOS), which offer a tax‑efficient way to run vehicles without traditional company‑car Benefit-in-Kind (BiK) tax. Most of you will already know these well.
And don’t worry about the delivery method of the benefit itself. Tell us the vehicles you want on your choice list, and we’ll work out which option fits best.
Salary sacrifice: unlocking EV affordability
With salary sacrifice, drivers give up some of their gross pay in return for an EV. Because BiK is so low – 3% in 2026/26 and rising slightly to 4% in April 2027 – many drivers can actually save money compared with taking out a similar personal lease. And just like a typical car scheme, things like insurance, maintenance, breakdown cover and VED are usually included.
For your business, there are Class 1 NIC savings, plus the added benefit of strengthening your environmental, social, and governance position.
ECOS: tax efficient ownership, flexible choice
ECOS transfers vehicle ownership to the driver, which eliminates company car BiK and offers flexibility across different fuel types. ECOS can boost satisfaction while giving you the option to manage costs predictably. In a blended approach, ECOS complements salary sacrifice by serving your drivers whose role or preference suits ownership rather than BiK usage, and by offering a blended solution you can tailor to your business needs or preference.
Together, salary sacrifice and ECOS give you a credible option to accelerate EV adoption – built on affordability, tax clarity, and user experience – without defaulting to deep discounting as the only lever.
How CBS can help automotive retailers in 2026
- Let us help you find the models that work best for your business: Focus on the models customers actually want and that turn quickly, helping you protect margins and avoid slow‑moving, loss‑making EV inventory.
- Use hybrids and benefit schemes to keep demand strong: Hybrids, salary sacrifice, and ECOS give your drivers more affordable routes into low‑emission driving without relying on heavy discounting.
- Keep working with CBS: Discuss what you’d like your future car scheme to look like, and let us shape that into a reality.
Why continue choosing CBS?
The UK’s 2026 ZEV mandate sets a 33% target for car sales, and it’s a clear sign of where the market is heading. Even with some flexibilities built in, the direction is obvious: OEMs and retailers need to sell more EVs – and do it in a way that works for your business and your drivers.
That’s where a blended car benefit approach, combining salary sacrifice with ECOS, really comes into its own. It gives drivers a genuinely affordable way into an EV, helps you maintain demand without having to rely on heavy discounting, and supports your business with the pressure to meet net‑zero goals.
If you’re focused on hitting your targets and keeping your drivers happy, building these benefits into your 2026 strategy is one of the quickest, smartest changes you can make.
Want to talk through how your current car scheme stacks up? Get in touch with your CBS account manager today.