UK electric car sales hit a record high in September, even as bosses from big carmakers told the chancellor that government targets were putting too much pressure on the industry.
The British industry sold 56,300 electric cars during the month, the highest on record, according to preliminary data published by the Society of Motor Manufacturers and Traders (SMMT), a lobby group.
That meant that 20.5% of sales during the month were electric.
However, the UK bosses of BMW, Ford and the Land Rover-maker JLR were among those who wrote to Rachel Reeves on Friday ramping up pressure for government subsidies for EV sales amid a race to comply with the UK’s zero-emission vehicle (ZEV) mandate. The initiative is aimed at managing the phase-out of new petrol and diesel car sales, and the switch to EVs, over the next six years.
The carmakers, who also included the UK leaders of Volkswagen, Mercedes-Benz, Nissan and Stellantis, argued that “our EV market looks set to miss its target”.
Manufacturers around the world have for months complained of stalling growth in the demand for EVs. Japan’s Toyota on Thursday said it would delay the start of electric vehicle production in the US until 2026, after previously suggesting that it would begin at the end of 2025. Ford and Volvo are also among those who have delayed their transition.
The SMMT figures showed registrations of new diesel cars for private buyers in September grew by about 17.2% compared with the same month in 2023. That compares with a rise of approximately 3.7% for pure battery electrics.
The plateau in global sales has forced carmakers in the UK into what the SMMT described as “unprecedented manufacturer discounting” to try to hit the ZEV mandate and avoid fines of up to £15,000 per vehicle if they fail to meet it. The SMMT said manufacturers had discounted electric cars by a cumulative £2bn so far this year.
Mike Hawes, the SMMT’s chief executive, said: “The cost of that compliance is astronomical, and is unsustainable.”
Yet environmental campaigners argue that the ZEV mandate is doing its job of pushing carmakers to increase sales of electric cars. The targets are set to tighten every year until 2030, when sales of new petrol and diesel cars will be banned (although some hybrids which combine a petrol engine with a smaller battery will be allowed until 2035).
“The regulation is working as planned,” said Ralph Palmer, UK electric vehicle and fleets officer for Transport & Environment, a campaign group. “The government should really not buckle to this pressure.”
September and March are the crucial months for UK car sales because number plates change, prompting a wave of buyers. (Cars with newer plates tend to hold their value slightly longer.) There were 275,000 sales of all new cars in the UK in September, 1.1% higher than last year, although still a fifth below sales in 2019, before the pandemic.
Last month’s electric car sales, to be finalised on Friday morning, were particularly vital because some manufacturers have left it late to meet targets for 2024. Under the ZEV mandate, carmakers must hit a nominal target of 22% of all sales being pure electric. Including the September sales, the industry is hitting 17.8% over the course of the year.
The carmakers argued in their letter to Reeves that “mandates don’t make markets” and that they needed subsidies for electric cars to stimulate demand.
They wrote: “As an industry we will likely miss those targets and a significant number of brands face the prospect of either buying credits from another company or paying swingeing compliance payments.”
The carmakers asked the chancellor to ease various taxes to help the industry, including a cut to VAT.
Robert Forrester, chief executive of Vertu Motors, has written to ministers asking for the government to go further and reduce the annual targets, aligning with an EU ban on internal combustion engine sales in 2035.
“Demand or adoption of EVs is not going anywhere near as fast as the regulators thought would happen,” he said, citing higher prices and gaps in the charger network.
Sue Robinson, chief executive of the National Franchised Dealers Association, a lobby group, also said the ZEV mandate was “unintentionally restricting the new car market” and called for a review.
However, there are important clauses in the ZEV mandate which mean carmakers will not have to hit the headline 22% this year. They can buy “credits” from other manufacturers who have beaten their targets, including the likes of Elon Musk’s Tesla and Chinese rival BYD, both of which sell only electric cars in the UK. Carmakers can also win credits by “over complying” in later years before the 2030 deadline and by making their petrol cars less polluting.
Ben Nelmes, chief executive of New Automotive, a thinktank, said he believed that the industry as a whole would not pay fines for 2024, although some carmakers may have to resort to buying credits from rivals.
Source: theguardian.com
