Fords UK boss demands substantial taxpayer subsidies for electric vehicles as sales fall below aggressive government targets to phase out petrol and diesel motors by 2030
Fords UK boss has demanded a return of subsidies for electric cars that were scrapped in 2022 - as new figures show manufacturers are not on target to hit the Governments 22 per cent sales goal for this year.
Fords UK boss has demanded a return of subsidies for electric cars that were scrapped in 2022 - as new figures show manufacturers are not on target to hit the Governments 22 per cent sales goal for this year.
Lisa Brankin, chair of the car maker in the UK, said earlier this week flagging sales needed to be boosted by a substantial grant, or by another financial incentive like a cut in VAT.
The grants, first introduced in 2011 to give buyers £5,000 off the price of a new electric car, were binned in 2022 after dropping to just £1,500. Around 400,000 grants were given worth a total of £1.5billion.
Car makers are struggling to meet a strict government target - officially known as the zero emission vehicle (ZEV) mandate - to make 22 per cent of their new car sales electric, with the target rising every year to hit 100 per cent by 2030.
Ford is cutting jobs in the UK amid its struggle to sell electric cars, and the wider car industry is in chaos amid global pressure to sell more EVs to motorists who are yet to be persuaded of their benefits.
The mandate has been blamed by Stellantis, parent company of Vauxhall, for the decision to close its Luton plant after 120 years of operation. Boss Carlos Tavares, who had aggressively pushed a pro-EV strategy, resigned at the weekend.
Volkswagen is mulling over the first ever factory closures in its history because of poor EV sales, prompting 100,000 walkouts across its German plants, while Nissan says it faces a make-or-break 12 months ahead.
Environmental campaigners say the UK government should hold firm on the mandate but Labour has held crunch talks with car makers over the penalties associated with missing the target - a brutal £15,000 fine per petrol or diesel car sold beyond the limit.
Lisa Brankin, chair of Ford UK and Ireland, says the Government needs to introduce substantial subsidies to drive sales of electric vehicles
She was speaking as she unveiled a new electric version of Fords small SUV, the Puma (pictured: the cars charging port)
Volkswagen workers walked out this week as the company mulled over factory closures for the first time in history as it struggled to sell EVs
And Ms Brankin says there needs to be greater help from ministers to encourage people to invest in an electric future.
Speaking as Ford launched its new Puma Gen-E electric small SUV earlier this week, she told Sky News: The mandate is a really aggressive trajectory to 2030 and the phase out of new petrol and diesel vehicles.
For us to get a return on our investment as a manufacturer we need and want to sell electric vehicles. The problem is customers are not moving as we would want.
The number one thing we want is direct customer incentives, perhaps a scrappage scheme, we have been calling for a cut in VAT on electric vehicles.
Asked whether it would need to be in the region of £5,000 to be effective, she said: It will need to be substantial.
Motoring trade body the SMMT said today electric car sales accounted for 25.1 per cent of all new car sales in November, the highest level in almost two years.
But overall market share in 2024 is just 18.7 per cent, more than three points short of the 22 per cent goal.
And the SMMT says the boost has been driven by unsustainable discounting. Showrooms have cut the prices of some electric models by as much as £15,000 in a bid to shift them.
Chief executive Mike Hawes said today: Manufacturers are investing at unprecedented levels to bring new zero emission models to market and spending billions on compelling offers.
Such incentives are unsustainable – industry cannot deliver the UKs world-leading ambitions alone.
It is right, therefore, that government urgently reviews the market regulation and the support necessary to drive it, given EV registrations need to rise by over a half next year.
Ambitious regulation, a bold plan for incentives and accelerated infrastructure rollout are essential for success, else UK jobs, investment and decarbonisation will be at further risk.
Carlos Tavares, CEO of Vauxhall parent company Stellantis, dramatically resigned at the weekend. The company is planning to close Vauxhalls Luton plant
Nissan workers on the production line at the factory in Sunderland. Nissan says the factory is a strategic plant unlikely to suffer as it culls 9,000 jobs
The Vauxhall plant in Luton, which faces closure. Management directly blamed the ZEV mandate for the decision
The figures came as a report from Auto Trader claimed the number of petrol cars on British roads has peaked and will tumble more than 40 per cent over the next decade.
The classified ads firm says it will take until next year for EVs to hit 23 per cent of the market - when the Government target is currently 28 per cent.
Commercial director Ian Plummer said peak petrol was a genuine landmark, adding that a third of used EVs on its website were now available for under £20,000.
A return of the £5,000 plug-in car grant would see some of Britains cheapest EVs available for around £10,000.
The cheapest electric car on sale today - discounting quadricycles such as the Citroen Ami - is the Dacia Spring, which is £14,995 and has a 140 mile range.
However, models from legacy car makers such as Nissan, Ford and Volkswagen cost substantially more, and remain more expensive than their equivalent petrol models because of the extra expense associated with battery technology.
They are facing challenges from Chinese manufacturers, which are undercutting them with cars produced for much less thanks to cheaper labour, and subsidies from the Chinese government.
Peugeots 208 supermini costs £23,935 with a petrol engine; the electric equivalent costs another £6,000 and has 224 miles of range. The BYD Dolphin, an electric Chinese rival, costs £26,195.
The European Union has deployed tariffs on Chinese imports in a bid to direct buyers towards its own manufacturers, but the UK has not followed suit, while China has responded by plotting to build factories within Europe to dodge the fees.
But for some manufacturers it may come too late. Experts say the firms that are struggling in the face of EV mandates are those that refused to invest early and often while others, such as BMW and Audi, are thriving.
Around 100,000 Volkswagen workers walked out in Germany on Monday after the company said it may close plants
Legacy car manufacturers are facing competition from Chinese brands armed with cheap labour and government subsidies, such as BYD (pictured: BYD cars at a motor show in Indonesia)
Fords new electric Puma is the companys smallest car after it scrapped the Fiesta supermini
New Automotives ZEV tracker shows that JLRs parent company Tata and Toyota are the two manufacturers set to miss targets by the most
Nissan, which launched the first mass-produced electric vehicle, the Leaf, in 2009, is among the companies in trouble. It has a make-or-break 12 months ahead as it cuts 9,000 jobs, while its CEO has taken a 50 per cent pay cut.
One plant likely to be safe is the Sunderland plant in Britain, which has made 11million Qashqai crossovers and has been safeguarded as the factory that will build all-electric versions of that model, as well as the Juke and a new version of the Leaf.
What we have today at Nissan is a man-made disaster. While its true that there has been a tremendous amount of uncertainty and disruption in the industry itself, this is basically a case of a failure of management strategy, Seiji Sugiura, senior analyst at Tokai Tokyo Intelligence Laboratory, told Reuters.
Andy Palmer, the automotive industry legend who oversaw the Leaf project, previously told MailOnline he had been disappointed by the uptake of the car.
I think we misjudged how difficult it would be (to persuade people to go electric), he said last month.
On Monday, an estimated 100,000 Volkswagen workers walked out of plants across Germany as the firm said it was considering closing factories for the first time in its 87-year history in order to reduce costs.
The firm is lagging in UK EV sales, with electric vehicles making up just 13.9 per cent of its total car sales in 2024.
Metalworking union IG Metall said the walkout was the first in a winter of protest as it urged VW to shelve the plans. It has suggested the firm ditches management bonuses among other savings; it said the suggestions were unrealistic.
Manufacturers ahead of the game on electric vehicles might even stand to make extra money - by selling car credits to other manufacturers that are yet to hit ZEV mandate targets.
But motor firms are also struggling to persuade people to buy electric vehicles over hybrids, which combine an electric motor with a traditional combustion engine. Hybrids and plug-in hybrids, the latter of which can run on the battery alone, are out-selling EVs in the UK.
The government is also set to give hybrids a 2035 stay of execution - reducing the incentive to buy a purely electric car. Buyers are also still concerned about electric car range and the availability of chargers as well as price.
Experts say car manufacturers that invested early and often into electric technology, such as Audi (above, an Audi Q6 e-tron electric SUV), were performing best in the market
The Nissan Leaf was the first modern mass produced electric car - but Andy Palmer (pictured), who led the project, said he was disappointed by its uptake 15 years ago
Car buyers are still worried about range anxiety and the availability of chargers to keep EVs topped up
Amid concerns over the ZEV mandate, the Government held crunch talks with manufacturers following the announcement that the Vauxhall plant in Luton was set to close.
Discussions are believed to have revolved around whether car makers could avoid paying the highly punitive £15,000 fines per petrol or diesel car sold outside of the target, money that analysts say could be funding research and development of better electric cars.
Experts say the Government should hold firm on the targets, at least, to keep the car industry in check.
Johann Beckford, senior policy adviser at Green Alliance, said the regulations were working and encouraging car makers to get their act together.
Doug Parr, Greenpeace UK policy director, added: Far from crippling the car industry, the tens of millions that BMW stands to make from selling credits after investing heavily in EVs prove that electric car targets for manufacturers can actually be a cash cow.
Accelerating the pace and scale of investment will enable the UK to keep a slice of the international pie in clean transport technology.
Now, it’s the government’s turn to ignore the noise and publicly confirm it will stick to its guns on the 2030 phase-out date for new petrol and diesel cars and vans, and the zero-emission vehicle mandate for manufacturers.
The Department for Transport was contacted for comment.
