Ford, BMW and other global carmakers have warned that any move by the UK to delay a 2030 ban on sales of new gasoline and diesel cars would undermine industry efforts to make the switch to electric vehicles.
UK Prime Minister Rishi Sunak is expected to roll back some of the government’s green energy policies in a speech Wednesday that is being viewed as a bid to win over voters angry at being penalized for driving older, polluting vehicles at a time of high inflation.
“We are committed to net zero by 2050 and the agreements we have made internationally, but doing so in a better, more proportionate way,” Sunak said in a statement late Tuesday, without providing further details.
One of the changes reportedly being considered by the UK government is to postpone by five years the ban on sales of new gasoline and diesel cars that is due to take effect in 2030.
The UK made the commitment in 2020, putting it on course to become the first major economy to decarbonize road transport — an essential step towards meeting its net zero commitments.
Automakers were quick to criticize the expected policy shift. They have committed billions to electrify their fleets ahead of the deadline and were hopeful that the 2030 target would boost demand for electric vehicles.
“Our business needs three things from the UK government: ambition, commitment, and consistency. A relaxation of 2030 would undermine all three,” Ford (F) UK chair Lisa Brankin said in a statement.
“We need the policy focus trained on bolstering the EV market in the short term and supporting consumers while headwinds are strong: infrastructure remains immature, tariffs loom and cost-of-living is high,” Brankin added.
Just last week, BMW announced a £600 million ($743 million) government-backed investment to build electric Minis at its Oxford and Swindon factories in the UK. The Mini brand is set to become purely electric from 2030 globally.
“We and the whole automotive industry [need] clarity on the [EV] topic,” the German carmaker said in a statement shared with CNN.
Stellantis (STLA), which owns the Fiat, Peugeot and Citroën brands, echoed the call for clarity and said it was committed to achieving 100% zero emission new car and van sales in the UK by the end of the decade.
Earlier this month, the company — formed from the merger between Fiat Chrysler and France’s PSA Group — marked the start of electric vehicle production at its Ellesmere Port facility outside Liverpool. It invested £100 million ($124 million) to transform the plant for EV production.
The UK auto industry has been clawing its way back from rock bottom after car manufacturing hit a 66-year low in 2022. The industry had also fallen behind in the race to develop EVs due to a dearth of local battery production.
It received a shot in the arm in July when India’s Tata Group said it would invest more than £4 billion ($4.9 billion) to build a UK gigafactory set to provide almost half of the batteries the UK will need by 2030.
The latest policy confusion could set back that progress and ultimately harm the economy if it jeopardizes the future of the UK’s auto manufacturing sector.
If Britain is to be a leader in phasing out polluting vehicles, “consumers must want to make the switch, which requires from government a clear, consistent message, attractive incentives and charging infrastructure that gives confidence rather than anxiety,” said Mike Hawes, CEO of the Society of Motor Manufacturers and Traders, an industry body.
“Confusion and uncertainty will only hold them back,” he added. Reducing emissions from road transport “is the only way that you will achieve net zero,” Hawes told the BBC.
The government’s own independent adviser on climate policy, the Climate Change Committee shares that view. In a 2020 report, the committee said that the “full transition” to EVs will be “one of the most important actions to achieve the UK’s net zero target.”
In moving to dilute the government’s climate policies, Sunak was likely bolstered by the outcome of a recent election in which his Conservative Party managed to retain a London seat it was widely expected to lose after voters rebelled against the city’s Ultra Low Emission Zone.
The ULEZ, which charges drivers £12.50 ($15.50) every day they use a car that doesn’t meet tough emissions standards, has been expanded by the opposition Labour Party’s London Mayor Sadiq Khan.
But Sunak faces criticism from within his own party. Pulling back on the climate agenda “will not help economically or electorally,” former business and energy minister Alok Sharma, who was president of the COP26 climate conference in Glasgow, said on X, the platform formerly known as Twitter.
Simon Clarke, another Conservative lawmaker, said on X that the move will “shatter” the UK’s consensus on tackling the climate crisis.
It could also hurt an industry that employs 780,000 people and accounts for 10% of UK exports. Most industry executives agree that a shift to electric cars is inevitable. And that shift is already gathering momentum in Britain.
EVs are expected to account for nearly 18% of new car registrations by the end of the year, up from just 0.7% in 2018, according to the SMMT.
If policy missteps or waning government support cause the UK to become an unattractive place to manufacture EVs, that could threaten the future of Britain’s auto sector.
Speaking to the PA Media news agency, Chris Skidmore, a former Conservative energy minister said: “Rishi Sunak still has time to think again and not make the greatest mistake of his premiership, condemning the UK to missing out on what can be the opportunity of the decade to deliver growth, jobs and future prosperity.”
— Gemma Blundell-Doyle, Anna Cooban and Laura Paddison contributed reporting.
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