UK to rethink EV mandate

Great Britain will amend the ZEV mandate, i.e. it is willing to revise the target imposed on car manufacturers to achieve a 22 per cent share of electric car sales this year. For the manufacturers, this is a breath of fresh air, after they were forced to offer what they said were "unsustainable" discounts to reach this target, although in October, according to SMMT data, the BEV share for new cars reached 21 per cent.

Stellantis has announced the closure of a plant in the UK and the car industry at large has warned that the plan would mean billions of pounds in additional costs for electric vehicle incentives. Nissan was particularly vocal in the debate.

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Demand for BEVs is too low

Demand for electric vehicles as we know is lower than expected, it is happening in Europe and also in the UK (only in China it is holding up thanks to strong political support). Car manufacturers in the UK risk fines of up to £15,000 per vehicle if they miss the target.

The Society of Motor Manufacturers and Traders has estimated that car manufacturers will offer UK consumers discounts of around £4 billion on electric vehicles this year, while likely falling short of the government's sales quota.

Mike Hawes, managing director of the trade group, questioned what he called a "build it and they will come" approach to the transition to electric vehicles. "The fact is we are building them, but they are not coming in sufficient numbers to buy them. We can't stimulate that market on our own."

What the government will do?

Finance Minister Rachel Reeves announced that the government will consult as soon as possible "to look at the legacy plans of the previous government."

"It's really important to make sure we get the balance right and (have) the right support for the automotive sector, the car industry, in Britain," she said. "We want people to buy electric vehicles, but we want to keep jobs, we want to keep investment in Britain and we are determined through the consultation to do just that."

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"We need an urgent review of the automotive market and the regulation intended to drive it. Not because we want to water down any commitments, but because delivery matters more than notional targets. The industry is hurting; profitability and viability are in jeopardy and jobs are on the line. When the world changes, so must we. Workable regulation – backed with incentives – will set us up for success and green growth over the next decade," Mike Hawes added.

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