UK government considers ‘flexibilities’ to help carmakers hit electric targets

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UK transport secretary Louise Haigh has insisted the government will not relax its electric vehicle targets but has admitted that ministers could create new “flexibilities” to help manufacturers achieve the goals.

The Financial Times revealed on Saturday that Nissan, the Japanese car manufacturer, was poised to warn ministers that the UK car industry had reached a “crisis point”, with jobs and investment at risk unless the government relaxed EV rules.

Under the government’s “electric vehicle mandate” a certain proportion of new cars sold in the UK have to be EVs, with the percentage ratcheting up every year until 2035 when all sales will have to be electric.

Companies that fail to hit those targets will have to pay punitive fines of £15,000 a vehicle.

EVs made up 18 per cent of new car sales in the UK in the first 10 months of the year, below the 22 per cent required for 2024.

Haigh said she was in “listening mode” about the challenges facing manufacturers ahead of her attending a bilateral meeting with Nissan on Monday and a wider roundtable with the automotive industry on Wednesday.

“There are flexibilities in the current mandate, but we want to work with the manufacturing sector about whether these are working and whether we can address them,” she told LBC radio. “But the level of our ambition and the mandate will not be weakened.”

Current flexibilities within the mandate include allowing struggling manufacturers to buy credits from competitors who have exceeded targets.

Next year the target increases to 28 per cent, which carmakers warn is too high to bridge with credits at a time when consumer demand is waning.

Government figures told the Sunday Times that “all options” were on the table to help British carmakers meet the targets. One government figure told the FT that ministers were “obviously live to” the situation. “Manufacturers have been quite frank how worried they are,” they said.

Proposals to make it easier for companies to reach the EV mandate include allowing them to count British-made cars sold abroad in their EV sales targets. Another is to equalise the percentage differential between cars and vans in the targets.

Meanwhile, Jaguar Land Rover has put forward a proposal of giving credit towards sales targets if manufacturers can demonstrate they have reduced carbon emissions in their factories.

The Department for Transport did not rule out any of those options on Sunday, with officials saying it was too early to be “prescriptive” on the details. Another government figure said: “We haven’t made any decisions yet.”

A person close to Nissan said movement on including foreign sales in EV targets would be “positive”, and it was welcome that options were being considered.

Nissan is one of the largest automotive employers in the UK with more than 6,000 workers at its Sunderland plant, which supports another 30,000 jobs across the supply chain and where the company has invested £6bn. 

Chancellor Rachel Reeves confirmed in the recent Budget that the government was banning the sale of new diesel and petrol cars from 2030, although a small and diminishing number of hybrid sales would be permitted until 2035.