Net Zero News – EV policy threatens net-zero retrofit funding

Welcome to Net Zero News, where we bring you the latest developments driving the UK’s transition to a net-zero future. In its latest AA UK EV Readiness Index, the AA has warned that uncertainty over electric vehicle policy could undermine drivers’ confidence to switch from petrol and diesel cars.

The AA published its annual EV Readiness Index in December 2025, surveying consumer attitudes and assessing charging infrastructure nationwide. The report highlights growing concern among motorists that mixed signals from government on incentive schemes, grant levels and long-term regulatory commitments are deterring new EV purchases. AA UK, the motoring services organisation behind the study, surveyed drivers across England, Scotland, Wales and Northern Ireland to gauge readiness for the upcoming ban on new internal combustion engine vehicles.

The AA Index tracks four core dimensions: consumer willingness, charging provision, vehicle availability and policy clarity. Net Zero News understands that while charging networks continue to expand, with private and public investment bolstering on-street and rapid chargers, unclear policy on vehicle subsidies and tax breaks is overshadowing infrastructure gains. Recent shifts in plug-in car grant levels and mixed messaging on the post-2030 petrol and diesel phase-out have created a pause in buyer confidence.

In a significant step towards the UK’s net-zero goals, the Transport Decarbonisation Plan set out by the Department for Transport in 2021 committed to phasing out new petrol and diesel car sales by 2030. However, the AA’s latest findings suggest that motorists remain cautious amid fluctuating grant thresholds and uncertainty over future benefit-in-kind tax rates for company cars. Net Zero News can reveal that nearly half of respondents cited lack of policy certainty as a barrier to rash purchases, despite record levels of model choice from manufacturers.

The implications for the UK’s 2050 net-zero target and interim carbon budgets are clear. Transport emissions account for around 27 per cent of total UK greenhouse gas output, making the rapid uptake of EVs essential. Sluggish consumer uptake risks prolonging reliance on fossil fuels and delaying emission reductions. The AA Index warns that sustained market confidence is crucial if the UK is to maintain its current trajectory towards reducing transport emissions by two-thirds relative to 1990 levels by 2035.

The AA EV Readiness Index is produced in collaboration with motoring groups, charging network operators and industry analysts. While the AA funds the research, Net Zero News understands that it engages with bodies including the Office for Zero Emission Vehicles and leading motor manufacturers to compile its quarterly assessments. The study draws on public charging data, sales figures and direct surveys of more than 5,000 licensed drivers.

This report arrives amid a broader policy landscape in which the UK government is reviewing its Future of Mobility Regulatory Review and updating guidance under the Road to Zero Strategy. Devolved administrations in Scotland and Wales have set even more ambitious targets for phasing out fossil fuel vehicles, further underlining the importance of clear national policy. Yet without consistent messaging on grants, tax incentives and infrastructure rollout, the AA warns that consumer confidence may wobble.

Communities in rural areas, where charging points remain less dense, are particularly sensitive to policy shifts. Car dealerships report cautious customer enquiries, with buyers seeking reassurance over total cost of ownership and residual values. Charging network operators, meanwhile, argue that stable public policy is needed to secure private investment in fast-charging hubs and to deliver equitable coverage across the UK.

Net Zero News understands ministers are preparing an updated statement on EV incentives in the coming months. Ensuring clarity on future grant levels and tax treatment will be vital to sustaining momentum in vehicle electrification and meeting key milestones under the sixth carbon budget.

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