UK launches review of electric vehicle sales targets

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The UK government has announced a consultation on its zero-emission vehicle targets, following complaints from carmakers that the current regime could lead to job cuts as demand for electric vehicles stagnates.

Transport Secretary Heidi Alexander has given the auto and freight industries eight weeks to present their views on existing targets for electric vehicles, including how existing “agreements and flexibilities” are working.

The zero-emission vehicle mandate was drawn up by the previous Conservative government at a time when electric vehicle sales were expected to take off.

Under current targets, a certain percentage of each automaker’s annual sales must be from zero-emission vehicles, with the percentage rising from 22 percent in 2024 to 80 percent in 2030. Companies face fines for not reach the target of £15,000 each. vehicle below the required level.

Electric vehicles accounted for 18 per cent of the UK car market between January and November this year, well below the 22 per cent threshold set by the mandate.

In November, Vauxhall owner Stellantis blamed electric vehicle rules for its plan to close its van factory in Luton, putting around 1,100 jobs at risk.

Ford has also announced 800 job cuts in the UK due to slower-than-expected sales of electric vehicles, while Nissan warned that jobs at its Sunderland plant, Britain’s largest, could be at risk. unless the government relaxes its electric vehicle sales rules.

But the government has made clear that the overall figure for 2030 will not be altered by the new consultation.

Alexander said: “In recent years, our automotive industry has been stifled by a lack of certainty and direction. “This government will change that.”

The consultation will be split into two parts: the first will consider which hybrid cars can be included on sale alongside zero-emission models between 2030 and 2035.

The Financial Times previously reported that ministers were interested in allowing carmakers to continue selling Prius-style hybrid models, which use a motor and battery in parallel, in the UK until 2035. Unlike “plug-in hybrids ”, which have larger batteries, “ Full hybrids do not plug in to recharge. On the contrary, conservatives are happy that gasoline and diesel models remain on sale.

The second part will consult on flexibilities within the 2030 target, and officials are understood to be open to several changes within the rules, including widening the “trading” loophole that allows carmakers to buy credits from rivals. to avoid fines.

Another “loan” scheme under which manufacturers can miss their initial targets but avoid fines by pledging to beat their targets in future years will also be extended by a few more years from its planned expiration in 2026.

Speaking to the Financial Times, Nicola Walker, Ford’s government affairs manager, said the company had called for a “moratorium” on fines in 2025 for companies that fail to meet their targets. However, this would involve changing primary legislation and is understood to be unlikely.

Business Secretary Jonathan Reynolds said: “We are steadfast in our mission to help our world-leading automotive industry prosper, and this consultation will look at how we can help manufacturers, investors and the wider industry achieve their goals. “.

The changes have been met with dismay by the charging point industry, which has warned that up to £6bn of investment up to 2030 could be at risk if the rules are substantially watered down.

Vicky Read, chief executive of ChargeUK, said she hoped the consultation would bring “certainty” to the electric vehicle and charging sectors after “a destabilizing few months, during which the fundamentals of electric vehicle policy have been called into question.” of the United Kingdom”.

Read urged the government to “keep calm” and maintain ambitious targets on electric vehicles.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: “The automotive industry welcomes the government’s review of both the end date for the sale of cars powered solely by petrol or diesel, as well as the possible changes in the flexibilities around the zero-emission vehicle”. mandate.”

He added: “It is imperative that we get an urgent resolution, with a clear intention to adapt regulation to support delivery, backed by bold incentives to stimulate demand.”