A dispute between the UK government and the automotive industry is intensifying as manufacturers warn that current electric vehicle (EV) sales targets are unrealistic given consumer demand. Despite calls for flexibility, the government plans to maintain its 2030 deadline for phasing out new petrol and diesel car sales.
The controversy has grown in the wake of Stellantis, the parent company of Vauxhall, announcing the closure of its Luton plant, potentially putting 1,100 jobs at risk.
Stellantis cited EV target rules as a contributing factor. The Society of Motor Manufacturers and Traders (SMMT) has urged the government to act swiftly to safeguard jobs and industry stability, warning that the current EV mandates could have “devastating impacts” on business viability.
Industry Demands Urgent Support to Boost EV Demand
Ford UK, which recently announced plans to cut 800 jobs over the next three years, has emphasized the need for government-backed incentives to drive EV sales. Lisa Brankin, Ford UK’s Chair and Managing Director, said on BBC Radio 4’s Today programme, “The mandate doesn’t work without demand. What we need is urgent government-backed incentives to boost EV uptake.”
Brankin noted that Ford has invested over £350 million in EV production and development in the UK, highlighting the importance of making EV adoption successful.
Under the zero-emission vehicle (ZEV) mandate, car manufacturers are required to ensure that 22% of their sales are EVs in 2024, increasing to 28% in 2025, and 80% by 2030. Firms failing to meet these targets face fines of £15,000 per non-compliant car sale.
To address compliance, manufacturers can purchase “credits” from EV-exclusive producers like Tesla or BYD. However, industry players argue this system forces them to subsidize foreign competitors with no UK manufacturing base.
Concerns Over Unsustainable EV Discounts and Job Viability
While EV sales have risen—accounting for one in five cars registered in October—industry insiders claim these figures are driven by unsustainable discounts rather than genuine demand. Nissan, which produces EVs at its Sunderland plant, warned that the current rules undermine the viability of UK manufacturing jobs and billions in investments.
At the annual SMMT dinner, Business Secretary Jonathan Reynolds expressed concerns over the ZEV policy’s execution. “I’m profoundly concerned by how zero-emission vehicle policies are operating today,” Reynolds said, emphasizing the urgency of revising the mandate to ensure it aligns with industry needs.
Reynolds confirmed that the government would fast-track a consultation on the ZEV mandate, promising clarity for manufacturers in the coming weeks. However, he reiterated the government’s commitment to the 2030 petrol and diesel sales ban.
Options for Flexibility
During discussions with industry leaders, the government explored potential adjustments to the EV sales mandate. Proposals include allowing sales credits to be transferred between car and van targets, offering credits for UK-made EVs sold abroad, and introducing new incentives for private buyers.
Transport Secretary Louise Haigh affirmed that while some flexibilities would be considered, the mandate itself would not be weakened. “The mandate will not be weakened,” she said, stressing that the government remains committed to meeting its climate goals.
Labour’s manifesto also supports the 2030 target, viewing it as non-negotiable.
However, manufacturers continue to call for more realistic targets and support mechanisms to balance the demand-supply gap in EV adoption.
This ongoing debate highlights the challenges of transitioning to zero-emission vehicles while protecting jobs and ensuring the UK remains competitive in the global automotive market.
