UK's EV Shift: A Consultation on Sales Targets
Wednesday, Nov 27, 2024 11:14 am ET
4min read The UK's transition to electric vehicles (EVs) is set to be a key talking point in the coming months, as the new Labour government announced a consultation on the sales targets for automakers during this crucial period. The move follows Stellantis' decision to close its van factory in Luton, citing stringent zero-emission vehicle (ZEV) mandates as a primary reason for the closure, which could result in over 1,000 job losses.
The consultation, to be fast-tracked by the government, aims to engage with industry stakeholders to address their concerns and gather feedback on the ZEV transition mandate and its flexibilities. This comes after the previous Conservative administration set a deadline of 2035 for phasing out the sale of new petrol and diesel-powered cars, with strict targets for manufacturers to meet.
Business Secretary Jonathan Reynolds acknowledged the challenges faced by automakers, stating that car manufacturers around the world are battling with increased costs, supply chain issues, and changing consumer demand in a highly competitive, fast-evolving market. The Society of Motor Manufacturers and Traders (SMMT) estimates that the ZEV mandate will cost automakers around 6 billion pounds ($7.5 billion) this year alone.
The consultation will likely focus on the specific targets, currently set at 22% of sales for 2024, rising to 80% by 2030, and the associated penalties for non-compliance, which amount to £15,000 ($19,000) per non-compliant vehicle sold. The government will also consider the impact of the sales targets on job creation, supply chain development, and consumer demand.
In its manifesto for government, Labour promised a "phase-out date of 2030 for new cars with internal combustion engines." However, Reynolds' use of the term "purely" in reference to the 2030 ban has led some to interpret that hybrid vehicles, which combine electric batteries with petrol or diesel power, could still be sold after this date.
The consultation process will be crucial in finding a balance between environmental goals and economic realities. The UK's commitment to phasing out internal combustion engines by 2030 remains unchanged, but the government is eager to engage with the industry to find a better way forward. By reviewing the ZEV mandate and considering industry feedback, the government aims to support automakers in meeting targets, preserving jobs, and maintaining the UK's competitiveness in electric vehicle manufacturing.
As the consultation progresses, investors should keep an eye on the developments in the UK's EV market and the potential impact on automakers' stock prices. The outcome of the consultation could have significant implications for the industry and the wider economy, shaping the future of the UK's automotive sector in the years to come.
The consultation, to be fast-tracked by the government, aims to engage with industry stakeholders to address their concerns and gather feedback on the ZEV transition mandate and its flexibilities. This comes after the previous Conservative administration set a deadline of 2035 for phasing out the sale of new petrol and diesel-powered cars, with strict targets for manufacturers to meet.
Business Secretary Jonathan Reynolds acknowledged the challenges faced by automakers, stating that car manufacturers around the world are battling with increased costs, supply chain issues, and changing consumer demand in a highly competitive, fast-evolving market. The Society of Motor Manufacturers and Traders (SMMT) estimates that the ZEV mandate will cost automakers around 6 billion pounds ($7.5 billion) this year alone.
The consultation will likely focus on the specific targets, currently set at 22% of sales for 2024, rising to 80% by 2030, and the associated penalties for non-compliance, which amount to £15,000 ($19,000) per non-compliant vehicle sold. The government will also consider the impact of the sales targets on job creation, supply chain development, and consumer demand.
In its manifesto for government, Labour promised a "phase-out date of 2030 for new cars with internal combustion engines." However, Reynolds' use of the term "purely" in reference to the 2030 ban has led some to interpret that hybrid vehicles, which combine electric batteries with petrol or diesel power, could still be sold after this date.
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The consultation process will be crucial in finding a balance between environmental goals and economic realities. The UK's commitment to phasing out internal combustion engines by 2030 remains unchanged, but the government is eager to engage with the industry to find a better way forward. By reviewing the ZEV mandate and considering industry feedback, the government aims to support automakers in meeting targets, preserving jobs, and maintaining the UK's competitiveness in electric vehicle manufacturing.
As the consultation progresses, investors should keep an eye on the developments in the UK's EV market and the potential impact on automakers' stock prices. The outcome of the consultation could have significant implications for the industry and the wider economy, shaping the future of the UK's automotive sector in the years to come.
