The UK’s Prime Minister Rishi Sunak’s decision to push the 2030 ban on fossil fuel vehicles by five years to 2035 has left automakers and EV industry experts scratching their heads, leading to worries about the government’s commitment to net zero and electrification of the country’s cars.
Last week, Rishi Sunak announced the U-turn on the policy, set out by his predecessor Boris Johnson in 2020, with whom he had clashed on previous occasions, amongst a reversal on a whole host other key green policies.
Andy Palmer, former CEO of Aston Martin, said the decision to delay the electrification plan was another sign that the UK’s Conservative Government lacks a long-term strategy.
He said: “In Britain, there’s no industrial strategy, no intent for industrial strategy and no desire for an industrial strategy.”
Palmer is known as the “Godfather of EVs” due to his work in launching the Nissan Leaf in 2010 when he was the COO at the Japanese company, with the Leaf now going on to become one of the world’s most popular battery-powered electric cars. He then went on to serve as the chief of Aston Martin from 2014 to 2020, and was previously also the CEO and Executive Vice-chairman of electric bus and van company, Switch.
The Brit now heads a Slovak EV battery startup called ‘Inobat’. He added that his company considering building battery plant in Britain, but is “focusing our attentions on Spain right now” because of a better long-term industrial plan and investor focus.
Palmer has been fiercely critical of the UK’s approach to electric vehicles in the past as well, calling it “flawed and inept”, and accused parties for using electric car policy as a “political football”, and “letting politics get in the way of our kids’ future health”.
“Undermining transition to EVs”
Not just Palmer, Ford’s UK chair Lisa Brankin has also said that Britain risked undermining the country’s transition to electric vehicles (EV) if the government relaxes its current target to ban new petrol and diesel car sales by 2030.
Brankin said in a statement: “The UK 2030 target is a vital catalyst to accelerate Ford into a cleaner future,” adding that dropping the 2030 deadline would be a mistake, and hinted it could put further investments at risk.
Ford said it had already invested £430 million in its UK facilities and had been planning further investments to fit with the 2030 timeline. She added: “Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three.
“We need the policy focus trained on bolstering the EV market in the short term and supporting consumers while headwinds are strong: infrastructure remains immature, tariffs loom and cost-of-living is high,” Brankin added.
Not the first pro-fossil fuel decision?
Following polarised debate over emissions charges on older more polluting vehicles, Sunak said he was seeking to help those stung by the cost-of-living crisis and unable to afford expensive EVs.
This recent decision has continued the long line of decisions which has led to anger and questioning from many environment groups, as well as condemnation from international figures like former Vice President of the United States of America Al Gore, who described Sunak’s watering down of key government policies as “shocking and disappointing” and “not what the world needs from the United Kingdom”.
Last month, Rishi Sunak and the Tory Government’s commitment to net-zero was also questioned after he announced at least 100 new oil and sea gas licences alongside a new carbon capture scheme in north-east Scotland. However, he reaffirmed that the ban still remains in place, amidst more than 40 Conservative MPs and peers writing to the Prime Minister to push back the deadline.
What will be the impact on the industry?
Industry analysts believe Sunak above all had undermined investment certainty when British companies are fighting to attract investors to a relatively small market cut loose from the European Union following Brexit.
However, there are also reports that many believe while there is cause for concern about supply chain and investment issues, the decision will not have a significant impact on the overall long-term strategies of most EV manufacturers.
In 2022, around 1.6 million new cars were sold in Britain, just 2 per cent of global sales, meaning the country has little impact on overall figures. Global carmakers have already bet big on electric – partly because it is too expensive to make combustion engine cars while also investing heavily in EVs.
Britain’s delay “won’t make much of a difference,” said Andy Leyland, managing director of Supply Chain Insights. “Legacy automotive needs to go full electric to be able to compete on cost with Tesla and Chinese producers.”
“Government’s decision will change little”
The Association of Fleet Professionals (AFP) also said that the decision to delay ending the sale of new, petrol and diesel cars and vans, is likely to have a limited impact on real world fleet strategies.
AFP Chair Paul Hollick said: “Businesses have put in huge amounts of work on electrification and spent substantial sums. The fact that the deadline can then be moved in what appears to be a fairly arbitrary manner doesn’t endear the Government to fleets.
“Many, many of our members take net zero very seriously at a corporate level and believe that we should be electrifying as quickly as possible, despite some of the obstacles that remain. There is a sense that the Government doesn’t necessarily share that priority.”
However, he said, the general consensus was that car fleet strategies would remain largely unaffected, while many van operators had already held strong doubts that the 2030 deadline could be met and the move to 2035 simply acted as an official acknowledgment.
He added: “The fact is that the UK forms a small part of the global car market and the decision to delay electrification here is not going to noticeably impact on manufacturer plans to end internal combustion engine production.”
“When it comes to cars, benefit-in-kind taxation hugely favouring EVs and the Zero Emissions Vehicle Mandate remain in place and there are apparently no plans to change them. This means fleets will continue to electrify their car fleets at a rapid pace and the Government’s decision will change little.”