To listen to UK car manufacturers in recent weeks has been to hear a counsel of despair over the electric vehicle market.

Struggling to hit targets imposed amid mixed messages from the last government, they have lobbied the new one to relax the rules.

Yet November’s figures show an industry not just hitting the 22% zero emission mandate (ZEV) but exceeding it, with EVs accounting for a quarter of all new sales.

In the week Ford joined Vauxhall and Nissan in calling for state incentives to boost sales, what are we to conclude?

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The industry says November is a blip, only the second month this year when EVs topped 22%, with the total for the year likely to fall just short of 19%, and only thanks to £4bn of discounting.

With the target rising to 28% next year, and fines of £15,000 for every vehicle by which they fall short, they say consumers need help, in the form of grants or tax breaks, to swallow their reservations about plugging in.

But the picture is not quite as simple as that.

Benefits beyond the headline target

While 22% is the headline target, manufacturers can benefit from flexibilities, including buying credits from competitors who exceed the target, to offset their shortfalls. (These carbon credits have long been a crucial revenue line for Tesla, raising almost $1.8bn (£1.41bn) last year.)

Proponents of EVs say once these are taken into account the “real” target is 19%, and with some manufacturers far exceeding targets, any shortfall can be met from competitors, with not a penny in fines going to the government.

New Automotive, which campaigns to increase the pace of the energy transition, tracks global EV sales and its latest figures show BMW-Mini, Jaguar and Vauxhall all recorded EV sales above 30%, with Peugeot, Renault, MG and Skoda exceeding 22% in November.

Biggest critics are furthest behind

According to New Automotive’s tracking of “real” targets for manufacturers, Ford, Stellantis, Nissan and VW are furthest behind.

Coincidentally or not, the first three of those have been the most vocal in calling for reform of the ZEV regime.

Consumer reservations about electric vehicles are real. Price, range and concerns over the charging network – all of which are improving – still give people pause. But the UK’s progress is remarkable.

Since 2017 new electric car registrations have grown from close to zero to 25% of the market, with petrol and diesel declining from around 95% to less than 40%, helped by the rise of hybrids. It is a fundamental change that mirrors the energy market, with the rise of wind power and the phase-out of coal.

And as with energy, the final steps to decarbonisation will be the hardest and, one way or another, the most expensive.

Which is why manufacturers are asking the state to give us a helping hand on the road.

Battery electric vehicles (BEVs) accounted for 25% of new car registrations in November, an almost 60% increase year-on-year and well above a government target manufacturers have called on ministers to relax.

BEVs were the only sector of the car market to see increased sales in November, which saw new registrations down almost 2%, the second consecutive month of contraction and a third in four months the industry blames on the race to meet EV targets.

Petrol registrations fell by almost 18% and account for 53% of new registrations in 2024, with diesel sales falling by more than 10% in November, and declining to 6.4% market share in the year to date. Hybrid sales, both mild and plug-in, also fell.

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The figures come as manufacturers have stepped up lobbying of ministers to provide support for the industry to meet a target that 22% of all car sales, and 10% of vans, must be zero-emission in 2022.

The industry says EV sales are rising only because of unsustainable discounting totalling £4bn this year, and this week Ford’s UK managing director told Sky News the government should consider direct cash incentives or tax cuts to support private EV sales.

Last week the business secretary Jonathan Reynolds announced a review of the zero emission mandate, which increases to 28% next year and every year towards the eventual phase out of new internal combustion vehicles in 2030.

His move followed the closure of Vauxhall’s diesel van plant at Luton, a decision owners Stellantis have been considering for some time but blamed on the UK’s environmental targets.

Figures for November also show a decline in fleet car sales, which do benefit from tax breaks for EVs and have driven much of the expansion in recent years. Private sales, which make up the bulk of the UK car market, accounted for just 40% of new registrations.

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The Society of Motor Manufacturers and Traders (SMMT) says EV market could reach 19% for the year, short of the 22% target, and that demand for electric cars is weaker than when the target regime was introduced by the Conservative government last year.

Mike Hawes, chief executive of the SMMT, said: “Manufacturers are investing at unprecedented levels to bring new zero emission models to market and spending billions on compelling offers. Such incentives are unsustainable – industry cannot deliver the UK’s world-leading ambitions alone.

“It is right, therefore, that government urgently reviews the market regulation and the support necessary to drive it, given EV registrations need to rise by over a half next year.”

The UK remains the second-largest market for EVs in Europe, with every major UK-based manufacturer (with the exception of Toyota) having committed to new electric models, powertrain or battery production in recent years.

Supporters of rapid decarbonisation of transport argue the figures show that manufacturers are meeting market demand, and that the government would be wrong to relax the headline target because some manufacturers are missing their market share.

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Ben Nelmes, CEO of New Automotive, said: “Thanks to the investments and efforts made by carmakers, UK motorists now have more electric options at more competitive prices than ever before.

“This impressive progress is the result of the combination of ambitious and flexible EV targets, and significant tax breaks for electric cars. This combination of targets and incentives is putting the UK in the fast lane to greater energy independence and cheaper, cleaner motoring.

“As global electric car sales wax and wane, the UK’s car market is heading in one direction – and fast. Ministers must not pull the rug under this progress as they revisit UK policy on EVs.”

Thames Water’s largest creditor group has failed to secure a veto over whether a £3bn emergency funding injection is used to settle regulatory fines imposed for a string of environmental and performance failings.

Sky News can reveal that a clause stipulating that the company’s A lenders – which account for well over £10bn of the debt owed by Britain’s biggest water company – would be able to block the payment of fines from their emergency liquidity injection was removed during an earlier stage of negotiations with the industry regulator.

A newspaper report earlier this week suggested that the creditors had told Ofwat that the capital could not be used to settle hundreds of millions of pounds in penalties due over the next 12 months.

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Sources close to the group confirmed on Thursday, however, that no formal veto existed.

“They wanted [a veto], but it was removed from the formal negotiations weeks ago,” said one.

In a term sheet issued several weeks ago and published on Thames Water’s website, the parties said that Thames Water would “use reasonable endeavours to engage with Ofwat, the Environmental Agency and the Drinking Water Inspectorate, to mitigate the financial impact of any potential fines that may be payable or compliance costs that may be incurred in connection with any investigation”.

Thames Water is drowning under well over £15bn of debt, and faces the prospect of being temporarily nationalised if it fails to secure billions of pounds in new equity funding in the coming months.

Sky News revealed last month that KKR, the private equity behemoth and a shareholder in Northumbrian Water, was among the parties engaged in talks with Thames Water’s advisers.

This week, Bloomberg reported that a consortium including Castle Water, which is controlled by the Conservative Party treasurer Graham Edwards, was preparing to inject up to £4bn in exchange for a controlling stake in the company.

The entire industry faces a crunch moment on December 19 when Ofwat issues its final determinations on water companies’ five-year investment plans.

Spokespeople for Thames Water and its creditors declined to comment.