– Review covers annual ZEV targets and OEM flexibilities
– Dealership community and OEMs have repeatedly called for change
– Consultation closes on October 23
The Government has launched a review of the zero emission vehicle mandate after sustained calls from the dealership community and vehicle manufacturers for the rules to reflect market demand and the commercial pressures facing the industry.
The Department for Transport consultation will examine the annual zero emission vehicle targets imposed on manufacturers, the effectiveness of existing compliance flexibilities and alternative policy approaches to address challenges emerging in the market.
It will also consider how the Government should define its commitment to end sales of new cars powered solely by internal combustion engines from 2030. All new cars and vans are currently expected to be zero emission by 2035.
The National Franchised Dealers Association (NFDA) said the review must deliver an affordable and commercially sustainable transition for consumers and retailers.
Timely opportunity to consider commercial reality
Sue Robinson, chief executive of the NFDA, said: “The review of the ZEV mandate is a timely opportunity to consider how the transition can work effectively for the whole automotive sector.
“The industry has made significant progress in increasing the availability and choice of electric vehicles, but the market must remain commercially sustainable.
“The results from the consultation need to ensure consumers have the choice and affordability needed to make the transition. Franchised retailers are playing a vital role in this process and have a clear understanding of the opportunities and challenges facing customers.”
Commenting, Robert Forrester, chief executive of AM100 dealership group Vertu Motors, said: “The UK new car market has suffered a number of years of dislocation due to the state intervening via the ZEV mandate. Its targets and the threat of fines have led to billions of pounds in discounts on battery electric vehicles to increase demand. This has meant fewer jobs, lower investment and reduced economic activity across the whole sector with profit pools reduced
“This is only set to worsen as the targets deviate from reality at an increased pace. The industry will be in an awful place with no change. It is a good sign from the new Government that it wants to create jobs, wealth and economic activity ahead of delusional green targets. The consultation is therefore welcomed.”
Mike Hawes, the Society of Motor Manufacturers and Traders’ chief executive, noted that the regulation was conceived under very different economic conditions characterised by cheaper energy, rapidly declining production costs, and more optimistic global demand expectations.
“Regulatory targets are now running ahead of current consumer demand, so this review is a timely opportunity to optimise the pace of change,” he said. “This is a regulation that increasingly dictates consumer choice – and therefore automotive companies’ future strategies and viability – so it must work for all involved.”
Consistency needed for investment planning
The announcement was met with consternation by some, however. Thom Groot, chief executive of The Electric Car Scheme said: “Diluting the ZEV mandate would be a catastrophic own goal. Consumer demand for EVs is growing, proof that the appetite is absolutely there. Through salary sacrifice alone, we’ve seen demand for new EVs double in the past year.
“Consumers and manufacturers alike need consistency to plan and invest. Watering down these targets would only benefit those who haven’t taken them seriously from the start. I would like to see the Government channel the momentum already gained into focusing on innovations and incentives that make EVs more accessible. We will make this clear in the review.”
The consultation is divided into five parts and will assess the mandate’s impact to date, emerging issues, possible policy changes and the carbon implications of the available options.
Most of the review is being conducted jointly by the UK Government, Scottish Government, Welsh Government and Northern Ireland’s Department for Infrastructure because the Vehicle Emissions Trading Schemes Order is devolved legislation.
The section covering the definition of the 2030 phase-out applies only to the UK Government because the policy is reserved to Westminster.
Evidence submitted could lead to further amendments to the mandate, which requires manufacturers to ensure an increasing proportion of their new car and van registrations are zero emission or use available compliance mechanisms.
The NFDA said it would continue engaging with the Government on behalf of franchised retailers during the consultation, which closes at 11.59pm on October 23.