UK launches review of electric vehicle sales targets

Stay up to date with free updates

Simply sign in Tram myFT Digest — delivered directly to your inbox.

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

Transport Minister Heidi Alexander has given the auto and charging industries eight weeks to make their case. existing EV targets including how existing “arrangements and flexibility” work.

The zero-emission vehicle regulation was introduced by the previous Conservative government at a time when electric vehicle sales were expected to soar.

Under current targets, a certain percentage of each automaker’s annual sales need to be zero-emission vehicles, with this percentage increasing from 22% by 2024 to 80 % by 2030. Firms face fines if they fail to meet the target of £15,000 each. vehicle below the required level.

Tram accounting accounting for 18% of the UK car market from January to November this year – much lower than the 22% threshold set by regulations.

In November, Vauxhall Stellantis owner blames electric vehicle regulations for plans to close its truck factory in Luton, putting around 1,100 jobs at risk.

Ford also announced 800 job cuts in the UK due to slower-than-expected electric vehicle sales. Nissan warns that jobs at its Sunderland plant, largest in the UK, could be at risk unless the government relaxes rules on selling electric vehicles.

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

“Over the past few years, our auto industry has been held back by a lack of certainty and direction,” Alexander said. This government will change that.”

The consultation will be divided into two parts: the first will look at which hybrid cars could be sold alongside zero-emissions models between 2030 and 2035.

The FT previously reported that ministers are keen to allow carmakers to continue selling Prius-style hybrid models – which use a motor and battery in tandem – in the UK until 2035. Unlike “plug-in hybrid vehicles,” which have larger batteries, “full hybrids” do not plug in to recharge. On the contrary, the Conservative Party is happy that gasoline and diesel models are still on sale.

The second part will consult on flexibility in the 2030 target, with officials understood to be willing to accept a number of changes in the rules, including widening the “trading” loophole. ” allows automakers to buy credits from competitors to avoid penalties.

Another “borrowing” scheme, under which manufacturers can miss initial targets but avoid penalties by pledging to overachieve in future years will also be extended for several years from now on. from its planned expiration in 2026.

Speaking to the Financial Times, Nicola Walker, Ford’s director of government affairs, said the company had called for a “pause” in fines by 2025 for companies that fail to meet targets. However, this would involve changing the underlying law and is understood to be unlikely.

Business secretary Jonathan Reynolds said: “We are steadfast in our mission to help the world’s leading automotive industry thrive and this consultation will look at how we can support manufacturers, investment and the industry as a whole to achieve their goals.”

The changes have been met with consternation from the charge point industry, which has warned up to £6bn of investment until 2030 could be at risk if the rules are significantly watered down.

Vicky Read, CEO of ChargeUK, said she hoped that the consultation would bring “certainty” to the electric vehicle and charging sectors after “several months of uncertainty, in which the underpinnings of vehicle policy UK electricity has been called into question.”

Read called on the government to “keep its head” and maintain its ambitious electric vehicle targets.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: “The motoring industry welcomes the government’s review of both sales end dates for cars only petrol or diesel and possible changes to flexibility around zero-emission vehicles.” entrusted.”

He added: “It is imperative that we have an urgent solution, with the clear aim of adapting regulation to support delivery, backed by bold incentives to stimulate demand. ”