Summary:
Chancellor Rachel Reeves has received a warning from the leaders of 12 major UK car brands regarding the government’s Zero Emission Vehicle (ZEV) Mandate. They argue that without incentives for private electric vehicle (EV) buyers, the mandate will fail. In an open letter, the executives emphasized that “consumers respond to carrots not sticks,” noting that despite the industry spending £2 billion on customer discounts for EVs, demand remains stagnant. Recent figures show that private demand for diesel cars increased by 17.1%, while demand for electric cars rose only 3.6% in September.
The CEOs expressed concerns that penalties for missing ZEV Mandate targets could lead to reduced investment, research and development, or job cuts, ultimately passing costs onto consumers. Although one in six new car registrations are zero-emission, the market share for EVs is not increasing significantly. The ZEV Mandate requires 22% of new car sales to be zero-emission by 2024, a target that many brands are likely to miss.
The letter, supported by the Society of Motor Manufacturers and Traders, pointed out that the initial assumptions behind the ZEV Mandate—such as steady market growth, affordable batteries, and a strong charging infrastructure—have proven flawed. As a result, many consumers are delaying new car purchases, with the average age of cars on UK roads rising to over nine years.
To address these issues, the SMMT is advocating for incentives for private buyers, including halving VAT on new EV purchases for three years, amending road tax for EVs, and reducing VAT on public charging. They believe that targeted incentives can stimulate demand and support the transition to electric vehicles.
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