U.K. Government Throws Potential Lifeline to Its Automakers

The U.K.’s auto industry is expelling a collective sigh of relief that its government is finally waking up to the potentially disastrous effects of a total internal-combustion-engine ban by 2030.

The government announces the launch of a cross-industry consultation on the phasing-out of new ICE vehicle sales by the deadline that has been brought forward from the previous government’s revised deadline of 2035 that matches a similar deadline being discussed by the European Union.

Perhaps optimistically, some proponents of ICE technology are hoping both the U.K. and EU regulators allow carbon-neutral-fueled new-vehicle sales beyond the deadlines, arguing that ICE can reduce CO2 emissions across the nations’ fleets quicker than forcing businesses and consumers into battery-electric vehicles before electricity grids are sufficiently developed.

The U.K.’s transport secretary, Heidi Alexander, is now inviting views from automotive and charging experts to “restore clarity” on how to deliver the ban, the BBC reports.

U.K. automakers slammed the planned ban in talks with government officials last month, with Ford saying the proposed Zero Emission Vehicle (ZEV) rules to enforce BEV sales “just doesn't work” when consumers just do not want them.

Lisa Brankin, Ford of Britain’s chair and managing director, tells BBC Radio 4's influential Today program: “The one thing that we really need is government-backed incentives to urgently boost the uptake of electric vehicles.”

Alexander counters that the industry had been “stifled by a lack of certainty and direction” over the past few years, adding: “This government will change that.”

The consultation proposes updates to the ZEV mandate, which sets out the percentage of new zero-emission cars and vans that manufacturers will be required to sell each year up to 2030.

This year, BEVs must make up 22% of any carmaker's car sales and 10% of van sales. This target is set to rise next year and, so far, automakers are failing to meet the targets and are threatened with billions of dollars in potential fines.

U.K. automakers can, instead, buy credits from BEV manufacturers but argue that this diverts essential investment in future technologies to companies, such as Tesla or one of the many Chinese importers that have no manufacturing footprint in the country.

Welcoming the consultation, Mike Hawes, chief executive of automotive industry body the Society of Motor Manufacturers and Traders, says: “The automotive industry welcomes government’s review of both the end-of-sale date for cars powered solely by petrol or diesel, and possible changes to the flexibilities around the ZEV mandate. These are both critical issues for an industry that is facing significant challenges globally as it tries to decarbonize ahead of natural market demand.

“Aside from the billions invested in new technologies and products, it has cost manufacturers in excess of £4 billion ($5 billion) in discounting in the U.K. this year alone. This is unsustainable and, with the 2025 market looking under even greater pressure, it is imperative we get an urgent resolution, with a clear intent to adapt the regulation to support delivery, backed by bold incentives to stimulate demand.

“Such action will support not only the industry but also deliver for the economy, consumer, government and the environment.”