UK government set to ease electric car sales targets for carmakers in 2025

UK carmakers might get an early Christmas present. Earlier this week, UK business minister Jonathan Reynolds confirmed the government will revise the rules around the zero-emission vehicle (ZEV) mandate.

Reynolds told an audience at a private dinner: “The transport secretary and I have heard you loud and clear on the need for support to make this transition a success. We’ll be consulting with you on changes to the ZEV mandate and inviting your views on options for a better way forward.”

To recap briefly, the ZEV mandate sets out sales targets for electric cars, and penalties if carmakers fall short of their quotas. Stellantis and Ford have been some of the more vocal opponents of the regulations, especially in light of slowing demand for electric cars.

In an exercise of maximum persuasion, trade body The Society of Motor Manufacturers and Traders spoke to government ministers and impressed upon them the need for a new approach.

SMMT boss Mike Hawes said: “At this pivotal moment we need an urgent review – of the market and the regulation intended to drive it. But not because we want to water down any commitments. We have already invested billions – increasing the UK’s electric car offering from 16 models to over 125. Electric vans from none to over 30. And in services to support, repair, remanufacture, recycle.

“This colossal investment is the result of decisions taken years ago. When the mandate was conceived, the world was very different – economically, geopolitically. Times have changed and not for the better. The cheaper raw materials have not come to pass. Nor the lower interest rates. Nor the cheaper energy. As a result we now expect to sell 116,000 fewer electric vehicles this year than when the mandate was announced.”

Hawes called for the government to reinstate incentives to encourage consumers to buy, as well as shifting the goalposts of the quotas which it calculates could cost the industry as much as £1.8 billion in non-compliance penalties if not adjusted accordingly.

MP Reynolds, along with transport minister Lilian Greenwood, confirmed that a consultation would be fast-tracked to implement revisions by January 2025. Naturally they didn’t specific exactly what would be revised, though Reynolds reaffirmed there would be no change in the reinstated 2030 deadline.

Just this week, Stellantis confirmed plans to close Vauxhall’s Luton factory and move existing projects – and some staff – to its Ellesmere Port plant. Whether any of these intended regulatory revisions will change the outcome for those employed in Luton remains to be seen.

Paul Hollick, chair of the Association of Fleet Professionals, said: “It has become clear that, however well-meaning its intentions, the ZEV Mandate needs to change, and it is good news that the government has recognised this fact relatively soon after being elected. However, the real test of the government will lie in the changes that it chooses to make.

“From a fleet point of view, we believe that while the car element of the ZEV Mandate requires some moderation, vans are the real issue. Electric van sales have been flatlining at around 5 per cent for over a year and the reasons for this are that the practical limitations of the available models – range, payload, charging facilities – make them unsuitable for many operators.

“Because of these factors, we’re in a situation where, no matter what percentage of new vans manufactured are electric, large numbers of our members are planning to stick with their existing diesel vans for the foreseeable future. Making fleets hang onto older, more polluting vehicles for longer is obviously not what the government intends.” Currently plug-in car grant incentives are available to van drivers.

More as we get it.