Environmental (Commonwealth Union)_ The UK automotive industry is urging the government to introduce fresh incentives to stimulate demand for electric vehicles (EVs), as the market faces stagnation despite stringent zero-emission vehicle (ZEV) mandates.
The Society of Motor Manufacturers and Traders (SMMT) has warned that the lack of consumer interest in EVs poses a significant risk to jobs and production. According to its research, only one in eight new car buyers plans to switch to an EV within the next three years. This sluggish adoption threatens the government’s target, which requires 28% of new cars sold in 2024 to be zero-emission, or manufacturers will face fines of £15,000 per non-compliant vehicle.
Calls to Reassess the ZEV Mandate
SMMT chief executive Mike Hawes emphasized the urgent need to “revisit the mandate”, not to abandon it, but to adjust it in light of higher energy costs and weaker organic EV growth than initially projected.
“The consequences of this regulatory framework and an inability to meet it are already becoming apparent,” Hawes stated. “We are seeing sales flattening, production declining, plants closing or consolidating, and jobs being lost. This should be a driver of growth, not de-industrialisation.”
One major casualty of the mandate is Stellantis’ van factory in Luton, which announced its closure in November, impacting 1,100 jobs.
Hawes stressed that while the automotive industry recognizes its responsibility in reducing carbon emissions, financial incentives are crucial to encourage private buyers. The industry spent £4.5bn in discounts last year to boost EV sales, yet consumer hesitation remains high.
Industry Leaders Demand Tax Cuts and Charging Incentives
Carmakers are urging the government to introduce key financial incentives, including:
- Halving VAT on new EVs to make them more affordable.
- Reducing VAT on public EV charging to match the 5% rate for household electricity, addressing concerns about the high cost of public charging.
David George, CEO of BMW UK & Ireland, warned of “incredible challenges” in 2024 if consumer demand does not align with government mandates.
Similarly, Ford’s UK managing director, Lisa Brankin, acknowledged the shift in sentiment and called for urgent action to turn the EV market around and drive demand.
Kia UK CEO, Paul Philpott, expressed concern that manufacturers are being forced to “incentivise and discount the very best technology”, making it harder to sustain profitability.
Government Stands Firm on EV Transition
Despite the industry’s concerns, future of roads minister Lilian Greenwood defended the government’s approach. She highlighted that more than one in four cars sold last month was an EV and that the UK now has over 75,000 public chargers. Greenwood reassured carmakers that the government is “running hell for leather” to expand charging infrastructure to meet ZEV targets.
The government remains committed to banning new petrol and diesel car sales by 2030 and vans by 2035, with Greenwood calling these pledges “iron clad”. She confirmed that consultations on post-2030 policy adjustments would be published in spring.
The Road Ahead
As the UK strives to meet its ambitious net-zero targets, the automotive industry is calling for immediate government action to boost EV affordability and infrastructure. Without fresh incentives, manufacturers fear the ZEV mandate could harm investment, jobs, and long-term EV adoption. The coming months will be crucial in determining whether policymakers can strike a balance between environmental commitments and industry sustainability.
