Ford Advocates for EV Incentives Amidst Industry Opposition to Sales Targets

Ford UK has urged the government to implement incentives aimed at encouraging consumers to purchase electric vehicles (EVs), amidst increasing industry opposition concerning sales targets. Lisa Brankin, who serves as Ford UK’s chair and managing director, informed the BBC that a government directive to manufacture and sell more EVs “just doesn’t work” without sufficient consumer demand. These remarks contribute to an escalating dispute between the government and the automotive sector regarding the gradual discontinuation of new petrol and diesel car sales over the coming years. On Tuesday, Stellantis, the company that owns Vauxhall, announced its intention to close its Luton plant, a move that jeopardizes 1,100 jobs, attributing this decision partly to electric vehicle (EV) targets. Business Secretary Jonathan Reynolds stated in the House of Commons on Wednesday that Stellantis’s choice represented “a dark day for Luton.” This development aligns with Ford’s recent reductions in its UK workforce; last week, Ford disclosed plans to eliminate 800 jobs in the UK over the next three years, citing the EV target and heightened competition as contributing factors. Ms Brankin conveyed to BBC Radio 4’s Today programme: “The one thing that we really need is government-backed incentives to urgently boost the uptake of electric vehicles.” She noted that Ford has made substantial investments in the production and development of EVs, allocating “well over” £350m towards electrification initiatives within the UK. She added, “So we kind of need to make it work.” Both companies have previously expressed concerns regarding their continued presence in the UK, citing factors distinct from EV targets. Ford, for instance, shut down its Bridgend factory in 2020, eliminating 1,644 positions, with Covid-19 cited as a contributing cause. Similarly, Vauxhall’s previous owner indicated in 2019 that Brexit posed a threat to its Luton facility. Concurrently, some analysts have suggested that a market shift towards luxury vehicles and away from more affordable models also contributes to Ford’s challenges. Reynolds attributed the blame for Stellantis’s Luton closure to the preceding government, stating that Labour had “inherited a position of extreme frustration.” He announced plans for a “fast track” consultation on the enforcement of EV targets, while reaffirming Labour’s dedication to a 2030 phase-out of new petrol and diesel vehicle sales. Conversely, shadow business secretary Andrew Griffith characterized the 2030 target as a “jobs killer” and asserted that Stellantis’s decision constituted “the direct result of a government policy that is simply unworkable for industry.” The preceding Conservative government had adjusted the deadline for the phase-out from 2030 to 2035, yet maintained penalties for non-compliance. According to the prevailing mandate, a specified percentage of vehicles sold by companies must be zero-emission. This year, electric vehicles (EVs) are mandated to constitute 22% of a company’s car sales and 10% of its van sales. For each car sale that falls outside this requirement, companies incur a £15,000 penalty. This target is scheduled to increase to 28% for cars and 16% for vans in 2025. The regulations are then slated to become progressively stricter annually, leading up to a comprehensive prohibition on the sale of new petrol and diesel cars. Labour has indicated its plan to reintroduce the 2030 target as part of its broader climate change policy objectives, though it will conduct consultations on the practical implementation of the policy’s “direction of travel.” The existing system incorporates flexibilities, permitting manufacturers unable to achieve the targets to purchase “credits” from those that can. Practically, this allows companies to acquire credits from manufacturers like Tesla or the Chinese firm BYD, both of which exclusively produce electric models. Automakers contend that consumer demand for electric cars has fallen short of initial projections made when the regulations were established. Consequently, to circumvent penalties, they report being compelled to offer significant discounts on new vehicles or to subsidize competitors that exclusively manufacture electric cars, none of whom possess a manufacturing base within the UK. Nevertheless, sales of electric cars have been on an upward trend. In October, they accounted for one in five newly registered vehicles. Sources within the industry, however, maintain that this growth is primarily attributable to unsustainable pricing reductions. Reynolds informed an industry gathering at a dinner hosted by the Society of Motor Manufacturers & Traders (SMMT) on Tuesday that he is “profoundly concerned” about the current operational methods of zero-emissions policies. He stated, “I don’t believe the policies that we have inherited, and I mean specifically in relation to zero emission vehicles, are operating today in a way anyone intended them to.” Last week, he and Transport Secretary Louise Haigh convened with automotive companies to discuss the EV regulations. Several proposals have been put forth, including permitting the transfer of sales credits between cars and vans, and awarding “credits” for British-made EVs exported internationally. The SMMT has urged immediate government action to protect the sector, cautioning that low demand for electric cars combined with the obligation to meet sales quotas had “the potential for devastating impacts on business viability and jobs.” Nissan, which manufactures EVs at its Sunderland plant, stated that the regulations are “undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment.” Copyright 2024 BBC. All rights reserved. The BBC is not responsible for the content of external sites. Read about our approach to external linking.