UK rethinks EV mandate amid industry challenges
Automakers struggled to meet ambitious zero-emission vehicle quotas this year, prompting the UK government to promise adjustments and more support.
The UK government is reconsidering its electric vehicle (EV) sales mandate after automakers signaled they won’t meet this year’s ambitious targets. Business and Trade Secretary Jonathan Reynolds announced plans to consult with manufacturers for a more feasible approach, Bloomberg reported.
The current mandate requires that 22% of new cars and 10% of vans sold by automakers be zero-emission by year-end. While the industry exceeded this target in a single month, consistent compliance remains elusive, even after billions in EV discounts.
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The EV industry has hit a roadblock
Reynolds's announcement follows Stellantis’s decision to shutter its Luton van factory, impacting 1,100 jobs. Production of electric vans will shift to the company’s Ellesmere Port facility. This closure is the latest blow to a UK auto industry grappling with slowing EV demand and stiff competition.
Nissan, the nation’s top manufacturer, has scaled back forecasts and announced global job cuts. Jaguar Land Rover won’t sell new vehicles under its Jaguar brand until 2026 as it undergoes a transformation. Meanwhile, Ford plans to eliminate 4,000 European jobs, primarily in the UK and Germany.
For Ford, the cuts aren’t entirely new. The automaker already shuttered its Bridgend, Wales factory back in late 2020, affecting 1,644 employees staffed there and ending 40 years of production at the plant.
“This industry is facing a greater set of challenges today than at any point in the last 50 years,” Reynolds said. “The news last week from Ford, and which I received from Stellantis today, only confirms what we already knew about the scale of those challenges. But it is no less painful.”
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Consumer reluctance is a leading force in the EV slowdown
Despite steep discounts, UK consumers remain hesitant to adopt EVs at the pace required. The Society of Motor Manufacturers and Traders (SMMT) estimates automakers will offer £4 billion ($5 billion) in EV incentives this year, which CEO Mike Hawes called unsustainable.
“The fact is, we are building them, but they aren’t coming in sufficient numbers to buy,” Hawes said. “We cannot incentivize that market on our own.”
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Government promises aim to keep the ship afloat
To address these issues, Reynolds pledged fast-tracked consultations to revise the EV mandate before 2024. He emphasized that decarbonization and industrial growth must coexist.
“When I say decarbonization must not mean deindustrialization, I mean it. Winning the race to net zero and having a world-leading automotive sector must go hand in hand,” Reynolds said.
Final thoughts
The UK’s auto sector faces a pivotal moment as it balances the push for net-zero emissions with the harsh realities of manufacturing and market demands.
Ambitious policy pushes toward electrifying the automotive industry have run up against market realities this year, with automakers struggling to navigate stagnant EV demand across North America and Europe.
As more governments pull back on their EV rebates, that demand is likely to shrink even further. If automakers want to continue driving interest in electric vehicles, they will have to find alternatives to simple financial incentives.
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