Labour listens to car industry concerns and agrees to 'change' electric vehicle targets - 'Totally committed'

Last week Business Secretary Jonathan Reynolds confirmed "a substantial change of policy" to the ZEV mandate following concerns from the Japanese carmaker.

The move aims to protect Britain's largest automotive plant, where thousands are employed and has been a pivotal investment in the country.

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Reynolds told The Times the Government would "do everything we can to make sure Nissan has that secure long-term future in the UK".

The policy shift has the backing of Energy Secretary Ed Miliband, despite his previous push for ambitious carbon reduction regulations.

"The whole Government is absolutely of the view that you will not get to the progress around net zero and the energy transition that we want to see by closing down British jobs and British industry," Reynolds said.

He added that the Government remains "committed to being ambitious on the environment and climate" while being "totally committed to vehicles being made in the UK." Reynolds, who attended school in Sunderland, expressed pride that former schoolmates work at the Nissan factory.

The current ZEV mandate requires at least 28 per cent of all car sales to be electric by this year before rising to 80 per cent in 2030 and 100 per cent in 2035.

Under the mandate manufacturers face fines of £15,000 for every non-compliant vehicle sold above the permitted limit. The automotive industry has been lobbying intensively for relief from these strict requirements.

Nissan has called for a two-year moratorium during which the scheme would monitor electric vehicle sales without imposing penalties.

Nissan's top executives have been actively lobbying the UK Government over the ZEV mandate. CEO Makoto Uchida of Nissan raised concerns over the ZEV mandate atlast year's international investment summit.

Guillaume Cartier, Nissan's European region chairman, wrote directly to ministers warning that the "current scheme poses a significant risk to us and the wider industry."

His letter, revealed by The Times last month, cautioned that the mandate "could have broader implications for the future of electric vehicle manufacturing in the UK."

While Reynolds declined to detail specific changes to the ZEV mandate, he told Uchida during a Tokyo meeting that "nothing is off the table. Potential reforms include "flexibilities" allowing companies to earn "credits" by reducing emissions from fuel-burning cars. Manufacturers could also "borrow" credits from future years to meet current targets.

In November, former Transport Secretary Louise Haigh stated that the Government would be willing to introduce "certain flexibilities" into the mandate to allow manufacturers more time to get to grips with the scheme and prevent them being tempted to leave the UK market.

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The Government is also said to be considering hybrid vehicles and other reduced-emission technologies when assessing carmakers' achievements. A reduction in the vehicle fines is also being considered. Reynolds emphasised the Government's pragmatic approach to environmental targets.

He said: "For us it's about being ambitious as to the destination [towards zero emissions] but making sure we're working with business to deliver on that ambitious end point. We've shown a level of pragmatism on that which is essential, and it's absolutely what Nissan wanted to see.

"We're committed to being ambitious on the environment and climate but we're totally committed to vehicles being made in the UK."