Low electric vehicle sales to cost industry £6bn this year
The Society of Motor Manufacturers and Traders (SMMT) has warned that falling electric vehicle sales and ever-increasing EV targets will cost the automotive industry £6bn this year.
It predicts this will rise again next year, with potentially devastating impacts for businesses and jobs, and is now calling on urgent government intervention around the transition to zero emission vehicles.
It says that the ZEV Mandate was introduced at a time when EV sales were on a sharp upwards trend and sales targets for 2024 were based on that trajectory.
However, despite substantial investment from manufacturers – there are now 125 zero emission models and 30 van models now available to the UK market – EV sales have slowed.
Electric vehicle sales
Zero emission cars are now expected to make up 18.7% of new registrations this year compared to the 23.3% that was anticipated when the ZEV Mandate was designed, with van sales at 5.7% compared to 10%.
To make up the shortfall manufacturers have offered an estimated £4bn worth of discounts this year, but car makers are still predicted to get a bill of £1.8bn for failing to meet targets, with compliance fines for van makers taking the total costs to over £6bn.
Mike Hawes, SMMT chief executive, 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. Workable regulation – backed with incentives – will set us up for success and green growth over the next decade.
“Rapid action to stimulate demand and adjust the regulation to reflect market realities is urgently needed to safeguard the sector’s potential to deliver £50bn in growth over the next decade. A robust, competitive market would ensure a greater volume of EVs reach the road more rapidly – a more important marker for decarbonisation than market share – and encourage greater investment in UK manufacturing and the thousands of jobs it provides.”
