Vertu Motors chief executive Robert Forrester has warned that the zero emission vehicle (ZEV) mandate is destroying automotive jobs and investment after a Labour MP dismissed calls for government support for manufacturers focused on petrol and diesel vehicles.
The AM100 dealership chief challenged Labour MP Perran Moon over the impact of the mandate – which requires manufacturers to sell an increasing proportion of zero-emission vehicles each year, or face fines – arguing that its targets are running ahead of natural consumer demand for electric vehicles.
The exchange followed a strongly worded LinkedIn post from Moon, the MP for Camborne, Redruth and Hayle and chair of the Electric Vehicles All-Party Parliamentary Group, addressing calls for a review of the mandate.
Moon said: “Right, let’s cut the crap about the ZEV Mandate Review:
“1. 80% of vehicles manufactured/assembled in the UK are exported and therefore not subject to UK ZEV mandate.
“2. It is NOT the job of Government to underwrite manufacturer’s commercial decisions to focus on internal combustion engines (ICE), rather than EVs.
“3. We are NOT going to break our manifesto commitment to ban the sale of new petrol and diesel vehicles by 2030.”
He said that, in reviewing the ZEV mandate, he would continue pressing the Government to consider the entire EV supply chain, including domestic lithium extraction, battery production and charging infrastructure, which already represented tens of billions of pounds of investment, rather than focusing solely on manufacturers of internal combustion engine vehicles.
He added that more UK and European manufacturers needed to recognise and embrace the opportunities presented by EVs, arguing that consumers were already doing so. Without faster action, he warned, Chinese manufacturers would dominate, leaving those that failed to adapt at risk of “becoming relics”.
His comments follow pledges earlier this month from Peter Kyle, the then-Secretary of State for Business and Trade, who told the Society of Motor Manufacturers and Traders (SMMT) International Automotive Summit, that the mandate would soon be reviewed. Kyle was subsequently removed from the cabinet following Andy Burnham’s arrival as Prime Minister.
Forrester warns of market damage
Forrester responded that the mandate was creating an imbalance between electric vehicle supply and customer demand, forcing manufacturers to discount cars to stimulate registrations.
He said: “I am afraid this post misses the point that this state intervention of aggressive targets and threats of fines impacts market balance. The EV targets are higher than the natural demand of consumers and businesses for the product.
“As a result supply exceeds demand. Prices therefore have to be reduced to levels below cost on EVs to stimulate demand. This impacts all OEMs who have all invested in EVs. Profits and returns disappear as noted by the SMMT with discounts of £5bn a year.
“The policy destroys jobs and investment across the sector. There is no debate about its impact from parts suppliers to retailers. You can pretend the world is different and Governments are in complete control.
“We live in a world of unforeseen consequences. The sector and the UK needs an urgent review of the mandate. Vertu represents 5pc of UK market and you would think that gives us a good perspective rooted in reality.”
Forrester’s comments were supported by Patrick Keating, head of external affairs at Honda Motor Europe, who argued that stronger consumer and charging infrastructure support would be needed if ministers intended to continue steering the market through sales target policies.
Keating said: “By not being aligned with natural demand for EVs, the mandate distorts the market. If the state is determined to steer the market to this extent, then it needs to do more than apply an OEM only mandate – much, much more needs to be done to support consumers, and a charging mandate also needs to be implemented.
“And more broadly, what is the ZEV mandate for? If it is to drive decarbonisation then more holistic approach which supports all mobility solutions would deliver more rapid and immediate carbon reduction.”
Charging investment at stake
Craig Marsden, chief executive of electric vehicle charging infrastructure accreditation business EVCI, backed Moon’s call for the government to consider investment across the wider EV supply chain.
He said: “For me point 4 is the one that never gets airtime and it’s the one that matters most. The charge point sector has already put its money down. Tens of billions, as you say. Every time the mandate gets wobbled, that capital gets repriced and not by ministers, but by investment committees who read the signal and quietly push their next tranche back a quarter.
“You can’t ask an industry to build ahead of demand and then keep asking whether demand is coming,” he said, adding that a mandate for charge point operators could provide greater certainty for investors and customers.
Ensure you always receive AM insights. Make us a preferred source of news on Google