Britain's new Labour government is set to launch a consultation on auto manufacturers' sales targets as the country transitions to electric vehicles. This decision comes in the wake of Stellantis, the owner of Vauxhall, announcing the closure of its van factory in southern England, potentially putting 1,100 jobs at risk.
The Business Secretary informed lawmakers that challenges faced by Stellantis in the shift to electric vehicles are not unique. The government aims to prevent the closure of the plant and address the issues at hand.
Stellantis attributed the closure of its Luton plant to the U.K.'s stringent zero-emission vehicle mandate, which imposes strict targets on manufacturers. The global demand for electric vehicles has been lower than expected, making it increasingly difficult for carmakers to be profitable, especially amidst slow global growth and high interest rates.
Other European manufacturers like Ford and Volkswagen have also announced plans to close operations due to challenges in meeting set targets.
The U.K.'s zero-emission vehicle mandate requires major car manufacturers to have electric vehicles account for 22% of their sales fleet in 2021, increasing to 28% in 2025 and further escalating in the following years. Failure to meet these targets results in fines for non-compliant vehicle sales.
The previous Conservative government established these targets two years ago, with a deadline of 2035 for phasing out the sale of new petrol and diesel-powered cars.
The new Labour government plans to review the zero-emission vehicle mandate as part of its consultation to ban the sale of new petrol and diesel cars by 2030. This move aims to engage with the industry on the transition mandate and its flexibilities.
Industry concerns arose over the future of hybrid vehicles following Labour's manifesto commitment to end sales of new petrol and diesel cars by 2030. The term 'purely' used in this context has sparked interpretations that hybrid vehicles may still be sold post-2030.
The Society of Motor Manufacturers and Traders emphasized its members' commitment to a decarbonized road transport sector but highlighted the significant costs associated with the zero-emission vehicle mandate. The industry lobby group called for an urgent review of the automotive market and regulations to ensure practical delivery over theoretical targets.
