The former CEO of Hyundai UK has called on car manufacturers to introduce incentives worth £8,000 for electric vehicles to help speed up the transition to net zero and avoid getting fined.
Tony Whitehorn, who led Hyundai in the UK from November 2011 to December 2018 and now works as an automotive consultant, said the incentives will help encourage more EV car purchases.
Speaking at an e-learning webinar, Whitehorn explained that massive discounts and incentives will be needed by carmakers to help increase sales of EVs and avoid sanctions.
Car manufacturers are being put under increasing pressure from the UK Government to try and accelerate the switch to electric vehicles to help the UK meet its 2030 goals.
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The mandate requires that 28 per cent of new car sales are EVs in 2025 moving up to 52 per cent in 2028
PA
The Government’s Zero Emission Vehicle mandate means that manufacturers will receive hefty fines if they do not reach targets for EV sales.
As it stands, manufacturers can receive a £15,000 fine per car sold that isn't compliant with the emissions standards by 2030.
The mandate requires that 28 per cent of new car sales are EVs in 2025 moving up to 52 per cent in 2028 and 80 per cent in 2030.
Then, by 2035, the hope is that 100 per cent of new vehicles sold in the UK will be emission-free, in line with the Government's petrol and diesel car phaseout.
Whitehorn said: “Car manufacturers are not making as much money out of EVs as they are out of vehicles with internal combustion engines.
“They’ve got to sell a whole load more battery electric vehicles to avoid paying hefty fines.
“Therefore, there are going to be big discounts and a lot of incentives to tempt people to purchase them.
“Already I’m seeing a large number of zero per cent finance offers, with huge financial deposit allowances – up to £8,000 on one volume-selling vehicle, which surprised me.”
Alban Treglohan, who runs the VW account for media agency PHD, warned that huge discounts could prove to be a "dangerous drug" for carmakers.
She explained how last year was a very challenging year for the EV market, and it’s becoming increasingly difficult to generate new demand for electric vehicles.
At present, EVs only account for 16 per cent of new car sales, and for some brands electric car sales are as little as three per cent of their overall annual figure.
What Car? target price expert, Pat Hoy, said that one solution could be that manufacturers "de-spec" the cars to make them cheaper.
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Tony Whitehorn led Hyundai in the UK from November 2011 to December 2018
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However, Hoy noted that this could also cause a problem where electric cars are perceived as being less desirable than their internal combustion engine counterparts.