Electric car mandate causing 'considerable' challenges as manufacturers debate slashing vehicle sales

Electric car mandate causing 'considerable' challenges as manufacturers debate slashing vehicle sales

WATCH: Steve Reed discusses electric cars

Hemma Visavadia

By Hemma Visavadia

Published: 02/05/2024

- 09:42

Carmakers can be fined £15,000 per vehicle which fails to meet ZEV targets

The newly-introduced Zero Emission Vehicle mandate risks scaring off car manufacturers who may be put off by the steep fines for non-compliant cars, according to experts.

The initiative requires at least 22 per cent of all new cars sold in the UK this year to be zero emission with carmakers warned of fines worth £15,000 per car and £9,000 per van if they are short of the target.

However, as more car brands work to expand their electric car numbers, research has warned that the level of new car registrations is still too few.

Insight from Cox Automotive stated the 10.4 per cent growth in new cars is “good news” but is still 17.9 per cent behind the pre-pandemic average for registrations recorded between 2000 and 2019.

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manufacturer and electric car

The ZEV mandate was introduced at the start of the year and will run until 2035


Philip Nothard, insight director at Cox Automotive, said: “Double-digit growth in the first three months is no mean feat and cannot be easily dismissed.

“But the market is a long way off what could reasonably be characterised as ‘normal’.

“That’s undoubtedly a bitter pill to swallow for Original Equipment Manufacturers and dealers as private registrations are where the healthier margins can be found, as was demonstrated during the supply constraints of the pandemic.

“On top of that, consumer doubts about the transition to electric, perhaps fuelled by EV affordability and infrastructure fears, persist.”

While the UK needs to hit its 22 per cent target this year, there are fears goals could be missed, with EVs only accounting for 15.5 per cent of the market.

Experts have highlighted that electric cars remain expensive and are putting drivers off purchasing. One solution could be removing some of the expensive features and technology to make them cheaper.

However, it has been acknowledged that if this were to become a trend, electric vehicles could be seen as less desirable than petrol and diesel models.

To avoid the fines, however, Philip said manufacturers could borrow a limited number of ZEV “allowances” until 2026.

He added that the borrowing could be capped and come with a “considerable” 3.5 per cent annual interest fee.

Another option car makers could consider is to reduce volumes in the UK market which would make more of their fleet compliant.

Philip added: “The market is moving in the right direction; a gradual recovery could arguably be said to be underway.

“However, it's important to acknowledge that significant challenges remain. We're not quite out of the woods yet, and a full return to pre-pandemic levels might still take some time.”


An electric car charger

Manufacturers need to have at least 22 per cent of new cars be electric by the end of the year


As part of the ZEV mandate, manufacturers will need to meet targets over the coming 11 years. This will require 80 per cent of new cars and 70 per cent of new vans sold to be zero emission by 2030, increasing to 100 per cent by 2035.

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