ZEV Mandate putting huge pressure of manufacturers
Electric vehicle sales must make up 40% of all new car registrations between now and the end of the year to meet ZEV Mandate targets.
Figures from the Society of Motor Manufacturers and Traders revealed that electric vehicles accounted for 30% of new car sales in June with hybrids and plug-in hybrids making up 25% of sales.
Across the year, electric vehicles have made up 25% of all new car sales, which is below the 33% Mandate target and means four in 10 new cars sold from now to the end of the year must be electric.
Mike Hawes, SMMT CEO, said: “The issue is not industry commitment but market deliverability. Manufacturers have already absorbed more than £12bn in discounts, alongside government incentives, to stimulate demand. Discounts are a regular feature of the new car market but are generally used to shift older stock, not stimulate sales from new. Such discounting cannot be the basis of a durable transition.”
ZEV Mandate targets rise to 38% for cars and 34% for vans next year, before increasing to 52% and 46% respectively in 2028.
Shortfall
Hawes continued: “The shortfall between natural demand and regulatory requirement is already substantial, and the cost of bridging it already being felt.
“This is not about simple compliance – after all, compliance is not optional. Manufacturers must either sell more EVs, buy credits from competitors or pay penalties. There is no avoiding the law and the cost.
“Flexibilities such as CO2 credits, borrowing and banking are undoubtedly critical and have helped manage the regulation’s early years. But they are finite, weaken over time and do not remove cost. Nor do they create the demand needed to recover the billions invested in developing and producing these vehicles.
“Ultimately, manufacturers need to sell the EVs they have produced, to recover investment and make the transition commercially viable.”
