Robert Forrester, the company’s chief executive, said: “The issue you’ve got is fleet demand for battery electric vehicles is very strong due to tax incentives, but retail demand [among private consumers] is weak.
“So if you can’t grow the battery electric vehicles to hit the percentage, the logical thing to do is to reduce the petrol and diesel supply.
“If you choke off petrol and diesel supply, then clearly I think prices probably will go up and actually used car prices definitely will go up.
“But also, I’m at a dealership in North Shields in North Tyneside right now, and we could get to the situation where somebody walks through the door wanting to buy a petrol car and we might not be able to supply one.”
In April, figures from the Society of Motor Manufacturers and Traders showed electric vehicles represented 16.9pc of the market. The industry group forecasts EVs will take a 19.8pc share in 2024 overall.
Mr Forrester’s warning echoes remarks by bosses from Ford and Vauxhall owner Stellantis in recent weeks, who criticised the Government for imposing ZEV mandate targets that appeared to be ahead of consumer demand.
Both Ford and Stellantis have warned they could restrict car sales to the UK if they are at risk of breaching the rules.
The Government has previously insisted that the ZEV mandate will safeguard British industry jobs and is “specifically designed to support existing manufacturers by providing flexibilities so they can comply with targets over time”.
It came as Vertu reported a steadying in values and recovery in demand for used cars in recent months, as it reported withstanding a “challenging” year of price volatility to post growing profits.
Sales at the dealership rose to £4.7bn in the year to February 29, up from £4bn the previous year. Profits rose 6.5pc to £34.6m.