By Rob Hull
Updated: 22:52 AEDT, 15 October 2024
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Bosses from 13 major manufacturers have written to the Chancellor pleading for a fresh wave of electric vehicle incentives to turbocharge floundering sales.
In a letter to Rachel Reeves ahead of the Budget, the Society of Motor Manufacturers and Traders and a host of car firms, including BMW, Ford, Toyota and Volkswagen, said government targets are putting too much pressure on the industry at a time when private EV demand is wavering.
That's despite September being the second best month for EV sales on record with 56,387 registrations.
Executives are calling for the introduction of new subsidies to boost sales as many car firms are falling behind the Government's binding Zero Emission Vehicle (ZEV) Mandate requirements.
Bosses from 13 major manufacturers have written to the Chancellor pleading for a fresh wave of electric vehicle incentives to turbocharge floundering sales
Jaguar Land Rover, Honda, Kia, taxi maker London Electric Vehicle Company, Mercedes, Nissan, Polestar, Stellantis and Volvo were the other major auto companies to sign the letter.
The hope is that Ms Reeves will take pity on their situation, with manufacturers set to face steep fines for failing to meet EV sales targets in 2024.
The ZEV mandate, launched in January, is designed to force makers to increase their share of electric vehicle sales in each of the next six years as part of the phase-out of new petrol and diesel models from 2030.
For this year, the mandate requires that 22 per cent of every brand's sales are fully electric, rising to 28 per cent next year and 33 per cent in 2026.
Four in five new car sales in 2030 will need to be electric, with the remaining 20 per cent allowance going only to certain hybrid models.
In 2035, only zero-emission cars - the majority of which will be EVs - will be allowed in showrooms.
Failure to meet the annual targets could result in fines of up to £15,000 per car - and £18,000 per van - below the threshold. However, manufacturers can also buy credits from rival marques who are above the required objectives, such as EV-only Tesla.
Manufacturers also receive credits towards their ZEV mandate counts if they show evidence of slashing the CO2 emissions of their new petrol and diesel models.
In their letter to the Chancellor, car said 'our EV market looks set to miss its target' for 2024.
This is despite 20.5 per cent of September's new cars being battery models.
That said, for the year to date, EVs account for only 17.8 per cent of registrations, which is well below the ZEV requirement.
SMMT registrations figures show that battery electric vehicles (BEVs) account for just 17.8% of all new car sales this year. This is below the 22% threshold set out by the ZEV mandate
A slower-than-anticipated uptake of battery vehicles isn't just impacting UK car sellers.
Manufacturers have in recent months responded to a global deceleration in EV demand with both short and longer-term adjustments to strategy.
Fiat, for instance, has put a seven-week suspension on production of its 500e model due to a decline in sales, Vauxhall has slashed prices of its EVs and Toyota said it has downgraded its 2026 electric car production plans.
Others have taken more dramatic approaches, with Volvo ditching its proposal to only sell EVs from 2030, Ford considering rationing new petrol availability to artificially inflate its EV registrations share, and a number of brands - including Mercedes and Skoda - extending the availability of internal combustion engines.
Toyota, which has been openly reluctant to ditch hybrid technology in the pursuit of full electrification, is predicted to end the year on just 10.9 per cent of the 22 ZEV sales target needed, with EVs accounting for just 10.1 per cent of all sales so far this year.
That's the joint lowest of all 20 major car firms tracked by New Automotive.
Toyota currently offers just one EV model in its range - the bZ4X - while its sister brand Lexus has the RZ and UX powered entirely by batteries.
Jaguar Land Rover's parent group Tata is also not doing well against the ZEV mandate targets, with the same estimated real ZEV sales target as Toyota at only 10.9 per cent.
This is perhaps not surprising as Land Rover has been slow to adopt EV despite sister brand Jaguar selling its I-Pace since 2018.
While the Coventry-based brand is undergoing a major overhaul, with Jaguar plotting a move to becoming an all-electric brand from next year and Land Rover promising six fully-electric models due to launch in the next five years, there is currently not much of an all-electric offering while the world awaits the new electric Range Rover.
JLR's parent company Tata is also set to miss ZEV mandate requirements by some distance in 2024. Jaguar is set to become an exclusive EV brand next year. However, the I-Pace (left) is currently the only EV both it and Land Rover offer
Mazda is only slightly ahead of Tata and Toyota, at 11.7 per cent of the target, with EVs accounting for a mere 4.9 per cent of new car sales.
Hyundai and Nissan are faring better with 15.8 per cent and 16.4 per cent ZEV sales target respectively.
New Automotive calculates the implied ZEV target by estimating the number of credits each manufacturer is expected to generate based on the CO2 ratings of newly registered ICE cars in 2024.
It bases the ZEV bulletin on DVLA data which is released monthly.
The research organisation also said that you can see 'CO2 flexibility in action' with a 'significant amount of credits are likely to be earned from the improvement in the average CO2 ratings of newly registered vehicles'.
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