Electric vehicle industry on knife edge amid warning of £6billion loss and 'jobs on the line'
WATCH: Danny Kelly hits out at ZEV mandate - 'It’s bad for the country!'
GB NEWS
The automotive industry is calling for direct support from the Government amid fears manufacturers could be hit with an enormous £6billion bill to meet EV targets.
New data from the Society of Motor Manufacturers and Traders (SMMT) has warned that the Zero Emission Vehicle (ZEV) mandate will cost the industry billions of pounds this year and even more next year.
The industry group is warning that it could have "potential for devastating impacts on business viability and jobs" amid calls for urgent Government intervention to safeguard the sector.
The ZEV mandate requires manufacturers to have 22 per cent of car sales and 10 per cent of van sales come from zero emission vehicles by the end of the year, with targets rising every year until 2030.
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Experts have warned that the UK car industry could be hammered without direct intervention
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However, the SMMT has warned that the need to fulfil these quotas and a dip in electric vehicle sales could undermine the UK industry without intervention.
While there are more than 125 zero emission car models and over 30 van models, as well as rapid improvements in battery technology, market demand is impacting the uptake of electric vehicles.
Since the mandate was announced, industry outlook suggests there will be 116,000 fewer new electric cars and vans registered this year compared with original expectations.
It was estimated that 457,000 new electric cars would be registered this year, accounting for 23.3 per cent of all new car registrations. However, new figures suggest only 363,000 cars will be sold for a market share of 18.7 per cent.
The outlook is more dire for electric vans. Estimates have been slashed to around 20,000 units to be registered. This represents a 5.7 per cent market share, compared with a ZEV target of 10 per cent.
Mike Hawes, chief executive of the SMMT said: "We need an urgent review of the automotive market and the regulation intended to drive it.
"Not because we want to water down any commitments, but because delivery matters more than notional targets.
"The industry is hurting; profitability and viability are in jeopardy and jobs are on the line. When the world changes, so must we."
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He added that workable regulations backed up by incentives will help the automotive sector be successful and lead to further sustainable growth over the next decade.
Because of falling consumer demand and ZEV targets, manufacturers are expected to slash prices. Incentivising fleet sales is expected to cost brands around £4billion in discounts.
The SMMT suggests that it will cost £1.8billion for brands to comply with the ZEV targets, either in fines or to buy credits from competitors who make EVs abroad.
It warned that losses of this scale could force brands to withdraw from the UK market and "cause global investors to question the UK’s appeal as a manufacturing destination".
LATEST DEVELOPMENTS:
Stellantis announced earlier this year that it would begin electric vehicle production in Luton in 2025 STELLANTISThe industry has highlighted how rapid action to stimulate demand and adjust regulations will help safeguard the sector and deliver up to £50billion in growth over the next 10 years.
It comes as Vauxhall owner Stellantis announced the closure of its Luton factory, citing fears around the ZEV mandate and its impact on manufacturing and profits.
As part of this, Stellantis will invest £50million to strengthen the Ellesmere Port plant in Cheshire to make the base its UK commercial vehicle manufacturing hub.
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