Binding targets for car makers to increase electric vehicle sales have taken a back seat in its ‘Powering Up Britain – The Net Zero Growth Plan’ unveiled on Thursday, much to the frustration of manufacturers.
A much-anticipated Zero Emission Vehicle (ZEV) mandate, which is due to set out strict requirements for car makers to sell an increasing share of electric vehicles annually from next year, was billed to take centre stage in today’s announcement.
However, Energy Security Secretary Grant Shapps instead confirmed that a consultation has been launched to ‘seek views on the final proposed regulatory framework’, including agreeing the trajectory of increased EV sales each year.
Failure to cement targets for 2024 has frustrated car manufacturers who are yet to receive confirmation for just how many electric models they must sell from next year, with the UK’s motor trade body saying the delays make it ‘near impossible’ for manufacturers to prepare.
The Zero Emission Vehicle (ZEV) mandate will outline annual targets for increase sales of electric cars starting in 2024. Today, a consultation was launched to seek views on its framework
Despite a raft of energy and net zero measures put forward by ministers today, confirmation of the full workings of the ZEV mandate is not one of them.
This is despite the car manufacturers’ eagerness to know what share of their 2024 sales need to be zero-emission electric cars to avoid significant financial penalties.
With the consultation due to close on 24 May and the rules around the mandate not likely to be rubberstamped until weeks later, car makers will have around just six months to prepare for the introduction of these legally binding sales targets.
Responding to the news today, Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders, said: ‘While the proposals rightly reflect the sector’s diversity, late publication and lack of regulatory certainty make product planning near impossible, and the continued lack of clarity as to what technologies will be permitted beyond 2030 undermines attempts to secure investment.’
Thom Groot, chief executive of the Electric Car Scheme, which runs salary sacrifice schemes to boost EV uptake, said he is ‘gravely concerned’ that the ZEV mandate remains ‘out for consultation’.
He describes it as an ‘essential tool’ to outline the transition to EVs moving towards 2024.
‘Transport is our biggest source of emissions and new fossil fuel cars are still outselling electric ones – we can’t just consult forever,’ Mr Groot said.
‘The auto industry needs those ZEV mandates for 2024 onwards locked in now, not subject to change on the whim of a minister, so it can plan supply accordingly.
‘Putting this issue out for yet another consultation just adds to uncertainty and lets car companies delay crucial decisions for next year’s fleet.
‘My company has huge demand from people desperate to get into an EV who are forced to wait because supply is low – a guaranteed amount of supply would help a lot.’
The mandate, which is due to set out strict targets for car makers to sell an increasing share of electric cars each year starting in 2024, had been billed to take centre stage in the Government’s ‘green’ announcements today
Failure to cement annual targets has frustrated car manufacturers who are yet to receive confirmation for just how many electric models they must sell from next year
Kim Royds, EV director at British Gas, added: ‘Today’s consultation announcement reaffirms the Government’s commitment to introducing the mandate next year. But the devil remains in the detail, with only nine months to go until it comes into force drivers and manufacturers need clarity to understand how the scheme will work.’
Mr Shapps today insisted that Britain’s ban on new petrol and diesel cars will still take effect from 2030, despite Europe watering down its own restrictions earlier this week.
He said the UK did not have to follow the EU, which has climbed down to allow sales of new internal combustion engine cars that only run on ‘e-fuels’ to continue after 2035.
Brussels on Tuesday approved a law to end sales of new CO2-emitting cars in the EU in 2035 – but Germany won an exemption for vehicles which burn carbon-neutral petrol alternatives.
Industry insiders say they are ‘gravely concerned’ that the ZEV mandate remains ‘out for consultation’ despite needing to be applied next year
Grant Shapps, Secretary of State for Energy Security, today insisted that Britain will remain on course with its plans to ban sales of new petrol and diesel cars from 2030
ZEV mandate: Over a fifth of all car sales next year need to be electric models
Ministers consider the ZEV mandate a stepping stone in efforts to decarbonise passenger vehicles by 2035.
The consultation launched today will seek industry agreement on the increasing levels of electric car sales from 2024 onwards.
It is seeking approval for 22 per cent of all car sales next year to be zero-emissions electric vehicles, and 10 per cent for vans.
These targets will be increased to 80 per cent and 70 per cent in 2030 respectively.
Some hybrid vehicles will remain on sale until 2035, and the target will be for 100 per cent of cars and vans sold from that date to be 100 per cent zero emission.
Manufacturers that fail to comply with the targets face fines of £15,000 for every non-ZEV car and £18,000 per non-ZEV van
The proposal is for the rules to apply to all manufacturers that produce over 2,500 vehicles per year.
The consultation also includes allowances to sell non-ZEVs up to a given percentage of a brand’s fleet of new cars and vans, with the intention that ZEVs account for the remainder of sales.
Any excess non-ZEV sales can be covered by purchasing allowances from other manufacturers, using allowances from past or future trading periods during the initial years of the policy, or offsetting with credits.
Manufacturers that fail to comply with the targets face fines of £15,000 for every non-ZEV car and £18,000 per non-ZEV van, the consultation says.
Extra credits will be on offer for vehicles deployed with car clubs, or those that are wheelchair accessible.
Auto Trader says just eight in 50 brands are currently selling enough EVs to meet the 22% share target for next year. Some of these eight (including Tesla) are electric-only makers
This graphic shows the electric ambitions of each car brand. Those in the dark green section have committed to being fully electric by 2030, while those in red have yet to rubberstamp their intentions to ditch petrol and diesel cars for good
Ian Plummer, commercial director at Auto Trader, said ministers have been forced to ‘accept practical realities’ facing them today with what it called a ‘watered-down proposal’ for the mandate.
‘Our data shows that only eight out of 50 brands had EV sales leads of more than 22 per cent in the first two months of 2023, so allowing manufacturers to borrow from future years’ allowances to hit the 22 per cent target in 2024 is common sense,’ he explained.
‘Manufacturers will only be allowed to play catch-up for so long however and if they can’t meet the targets, or borrow credits from outperformers, they face steep penalties of £15,000 per non-ZEV car.’
In the last 12 months, some 1,646,417 passenger cars have been registered in Britain, according to official SMMT figures.
Of these, 271,957 are zero-emission battery-electric vehicles, accounting for a share of 16.5 per cent – some 8.5 per cent lower than what is expected of car makers from next year.
Shapps’ multi-point green announcement today did include confirmation of a fresh £380million investment in EV charging points and infrastructure.
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