Tuesday, May 21, 2024

UK Automobile Industry Falls Short of Government’s Electric Vehicle Sales Targets

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Car Manufacturers to Fall Short of Electric Vehicle Sales Target

It appears that auto manufacturers will not meet the UK government’s electric vehicle (EV) sales targets for this year. The Society of Motor Manufacturers and Traders (SMMT) has reported to the Commons’ Transport Select Committee that the expected market share for pure battery electric vehicles (BEVs) will only reach 19.8 percent for the current year, falling short of the anticipated 22 percent.

Introduced into law in January, the Zero Emission Vehicle (ZEV) mandate requires that at least 22 percent of new cars and 10 percent of new vans sold by major vehicle manufacturers in the UK in 2024 must be zero-emission, typically referring to pure electric vehicles. The target is part of a scaling effort to increase to 28 percent in 2025, 80 percent by 2030, and achieve complete zero emissions from new sales by 2035, ahead of the planned ban on new petrol and diesel model sales.

David Wong, the SMMT head of technology and innovation, conveyed to the committee that the industry is not on track to meet this year’s ZEV mandate goals, citing percentages below the required thresholds for both electric cars and vans.

Recent months have seen a deceleration in EV sales due to reduced demand from private buyers, attributed to high initial costs of EVs, range anxiety, an inadequate public charging infrastructure, and the recent rise in energy prices. While the general public’s EV registrations have dwindled, it is noted that fleets and businesses are primarily driving the electric vehicle sales uptick, benefiting from favorable taxation policies.

Under the ZEV mandate, failure to meet the set EV sales targets could result in significant fines for manufacturers, calculated per vehicle below the threshold. However, early policy flexibilities such as purchasing credits from other manufacturers or using past or future allowances should prevent immediate fines, according to industry experts.

In the face of these challenges, calls for incentives to boost EV adoption have intensified. Quentin Willson, founder of EV campaign group FairCharge, advocated for “inexpensive incentives” to make owning an EV more attractive. Suggestions include free parking and allowing EVs to use bus lanes, alongside efforts to combat misinformation about electric vehicles regarding their reliability and performance.

Last year welcomed almost 315,000 new EV registrations in the UK, marking a significant year-on-year increase and demonstrating a steady, albeit slower than desired, progress towards electrification. Nonetheless, the AA remains optimistic about the future of EV sales, proposing new government incentives to encourage even more drivers to make the switch from petrol and diesel models.

Jack Cousens, head of roads policy at the AA, emphasized the role of strong incentives in exceeding the ZEV mandate targets. He suggests eliminating VAT on new EV sales as a measure to assist those with lower incomes in transitioning to electric mobility. Meanwhile, the decline in privately owned diesel vehicles in London and across the UK reflects changing public sentiments and regulations aimed at improving air quality.

While the industry faces challenges in meeting initial ZEV mandate targets, ongoing efforts from manufacturers, combined with proposed financial incentives and improvements to infrastructure, may yet accelerate the journey towards a fully electric vehicle market in the coming years.

With a clear focus on increasing electric vehicle uptake to meet environmental goals, the path forward involves collaboration between the automotive industry, policymakers, and consumers alike to overcome current barriers and embrace a sustainable motoring future.

Jordan Clark
Jordan Clarkhttps://www.businessorbital.com/
Jordan Clark brings a dynamic and investigative approach to business reporting. Holding a degree in Business Administration and a certification in Data Analysis, Jordan has an eye for detail and a knack for uncovering the stories behind the numbers. His career began in the bustling world of Silicon Valley startups, giving him firsthand experience in tech entrepreneurship and venture capital. Jordan's reports often focus on technology's impact on business, startup culture, and emerging

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