The government has been urged not to cave to “short-sighted” demands to water down proposed sales targets for electric vehicles (EV) in the UK.
A consortium of investors and operators in the EV charging industry warned changes to the so-called ZEV mandate would put “thousands of jobs throughout the low carbon transport supply chain at risk” and threaten billions of pounds of inward investment.
It comes after ministers announced a consultation into new rules that stipulate British carmakers must sell a minimum of 22 per cent zero-emission vehicles in 2024, or face fines proportionate to the extent the target is missed.
The ZEV mandate will increase yearly until it reaches 100 per cent by 2035, however the government is currently considering reducing the per-car penalty from its current £15,000 level and introducing certain “flexibilities” to the scheme.
The apparent shift follows intense lobbying from the UK’s traditional automakers, many of which are also grappling with increasing competition from Chinese manufacturers and have warned of cutbacks, job losses and a retreat from global investors.
EVs made up 18 per cent of the industry’s market share between January and November this year, according to the Society of Motor Manufacturers and Traders (SMMT), below the ZEV mandate’s current 22 per cent target.
However, a slew of trade associations, including ChargeUK, the Association of Renewable Energy and Clean Technology (REA) and the UK Sustainable Investment and Finance Association (UKSIF), argued on Monday carmakers were “on target” to hit the ZEV mandate in 2024, thanks to rising consumer demand for electric models and certain flexibilities already worked in by the government.
“A swift, decisive and public confirmation by government that EV sales targets will remain unchanged is needed for private investors to fund rapid rollout of charging infrastructure, and to reassure consumers that their next vehicle should be zero emission,” a joint statement read.
Figures surrounding private demand for EVs have proved a tension point in the industry over the last year.
The SMMT’s rolling reports are the most commonly relied upon source of car sales data in the UK, yet some groups are concerned they do not actively reflect private sales of electric cars, given deals made via things like salary sacrifice schemes are categorised seperately.
When the Dutch carmaking giant Stellantis recently announced plans to close its Luton factory, it cited the ZEV mandate. However, many in the sector pushed back against its reasoning, given the plant had struggled for years and Stellantis’ shares have fallen over 40 per cent in the last 12 months. Its chief executive quit abruptly in early December following a boardroom spat.
Other issues include the provision of EV charging infrastructure, the lack of which may deter drivers more used to more reliable petrol station stops. A recent National Audit Office (NAO) found the UK’s charging industry, made up of the likes of Pod Point, Gridserve and Instavolt, is on track to exceed a previous target of 300,000 public chargers by 2030.
“The ZEV Mandate is working,” Vicky Read, chief executive of ChargeUK, which represents the industry, said in a statement. “More and more new and used EVs are being sold as drivers embrace the switch to electric vehicles.”
But she warned such a huge shift hadn’t “happened by accident,” with its members able to execute plans only with the confidence provided by government backing.
ChargeUK’s members have committed to up to £6bn in investment in EV infrastructure by 2030. “We need ministers to reconfirm that they will stand by the current ZEV mandate or they risk fatally spooking the very investors they say they are so keen to attract to the UK,” Read said.
James Alexander chief executive of UKSIF noted some of the UK’s largest pension funds had made “significant investments” in EVs and charging infrastructure based on the long-term confidence provided by the ZEV mandate.” He warned “policy wavering” risked undermining that confidence and would be “very hard” to recover from.
“Private finance is ready and waiting to finance electric vehicles and charge points, but other geographies are doing a better job of providing a transparent, consistent policy approach, and the UK risks losing out.”
A government spokesperson said: “The government’s longstanding commitment is to phase out the sale of new cars powered solely by internal combustion engines by 2030 – this has not changed.
“This provides the vehicle manufacturing and charging industries with the certainty they need to invest in the transition, driving growth as we accelerate towards net zero.
“We are investing £2.3bn to boost the uptake of electric vehicles, and our measures are working, with EVs making up one in four of all cars sold this November.”
The SMMT has been approached for comment.