The government has agreed to consult on targets for new electric car sales, following growing concern from car firms that they are too high for current consumer demand.
While the 2030 deadline for banning the sale of new cars which rely solely on internal combustion engines is expected to remain unchanged, Business Secretary Jonathan Reynolds confirmed at an industry dinner last night that government would consult on the zero emission vehicle (ZEV) mandate.
It requires that battery electric vehicles must make up 22% of a company’s new car sales and 10% of its vans sales this year. Under the existing ZEV arrangement, for every car sold outside of the targets firms must pay a £15,000 fine.
Yesterday’s move came on the same day that Vauxhall’s owner Stellantis said it would close a plant at Ellesmere Port, partly because of the phase out of petrol and diesel vehicles.
The Society of Motor Manufacturers has warned that urgent government intervention is needed to protect the manufacturing sector, with targets set to become even tougher next year.
The current plan is that 28% of new cars and 16% of vans sold will be electric in 2025, and that by 2030, this will rise to 80%. Certain undisclosed types of hybrids will be allowed to be sold until 2035 before an emissions free car and van market kicks in.
There are flexibilities in the current system, but they are flawed says the industry. Manufacturers struggling to meet the targets can buy “credits” from those who can, generally companies such as Tesla or Chinese firm BYD, which exclusively build electric models.
Manufacturers argue that demand for electric vehicles has not been as high as was expected when the rules were drawn up by the previous government, and to avoid fines they are discounting heavily, or subsidising rivals that build electric cars only.
At the dinner for the Society of Motor Manufacturers and Traders last night, Reynolds said he was “profoundly concerned” about the way zero emissions policies, inherited from the Conservative government, currently operate.
He told the audience: “We know you need certainty and that’s why we will fast track that consultation, giving you clarity on the direction of travel and ensuring you have the answers you need in the coming weeks.”
