Electric vehicle mandate and tariffs put carmakers ‘at risk’
Britain’s ailing car industry could be hollowed out without urgent action to tackle the twin blows of tariffs and the government’s EV mandate, the head of its industry body has warned.
Speaking at the SMMT’s annual summit, boss Mike Hawes said that the so-called ZEV mandate – a policy that forces carmakers to sell a growing proportion of electric cars each year – was “running ahead of natural market demand”, and weakening the UK market.
Pressure has been growing on ministers to water down the severity of the mandate, which was first introduced by Boris Johnson’s Conservative government, before the end of the year, when 38 per cent of every car a company sells will have to be an electric vehicle.
By 2028 that figure is set to rise to more than 52 per cent, a level which Hawes warned was financially unfeasible for carmakers and lead to a glut of cars being bought from abroad in order for the UK to hit its targets.
There are people who say that “if we all have to buy EVs from abroad to hit the UK’s target, so be it,” he said, “and the UK would therefore meet its climate goals, but the domestic industry will become collateral damage.”
Hawes’ warnings come amid a period of intense speculation over the government’s electric vehicle mandate, after a string of carmakers shuttered plants in Britain. Last year, Vauxhall-maker Stellantis ended operations in its Luton megaplant, citing central government policy, and it has emerged that both Jaguar Land Rover and Nissan have lobbied against the targets.
Starmer was planning to dilute the measures before he resigned, according to The Sunday Times.
‘Window for action closing’ on ZEV mandate
“Reforming the ZEV mandate is not about weakening ambition; it is about making the transition achievable, protecting investment and ensuring the UK remains a place where automotive businesses can build, sell, export and grow,” Hawes said. “The window for action is closing, which means we cannot wait for lengthy discussions.”
In a speech in London, the industry chief, whose SMMT is the British carmarking sector’s largest industry body, also railed against the European Union’s sweeping ‘Made in Europe’ measures due to come into force at the start of next year.
The trading bloc’s protectionist package will mean that goods made wholly or mostly in Europe will benefit from preferential trading treatment, unless Britain successfully secures a concession from Europe for its products to be viewed as part of the continent.
“Next year those rules threaten a 10 per cent tariff on 70 per cent of electrified passenger vehicles crossing the channel, putting a £16.4bn of UK trade at risk and carrying a joint tariff bill of £1.4bn,” Hawes said. “Now, with global competition fiercer than ever, the last thing we need is additional costs of that trade, so we need a joint solution.”
A government spokesman said: “We’re backing British businesses to make the transition to electric with £7.5bn to boost EV manufacturing, increase sales and build up the UK charging network.
“The UK EV market is strong with May EV sales up 34 per cent on last year, but we’ve always said we’ll review the ZEV Mandate to make sure we’re taking a pragmatic, balanced approach that supports British industry and keeps driving investment.”