Prime Minister Rishi Sunak’s announcement that the ban on petrol and diesel new car sales would be kicked back from 2030 to 2035 has provoked strong reactions.
Environmental groups accuse the PM of watering down commitments to Net Zero, while some automakers are angry that the decision will create confusion within the market.
However, in reality, the policy shift is likely to have a negligible impact on the transition to electric cars. Rather, it shines a harsh spotlight on other challenges that must be overcome, including EV charging infrastructure, and protecting the undeveloped lower end of the EV market from low-cost Chinese EV “dumping”.
Under existing policy, the ban on ICE-engined cars allowed a 5-year stay of execution for plug-in hybrids until 2035. Under the new plans, it would appear that there will be no further extension for PHEVs until 2040. Rather, PHEV sales will end along with all other ICE-engined cars in 2035.
Furthermore, the Government’s EV quotas, agreed earlier in the year with the automakers, are unaffected by the latest announcement. This requires that 22% of each automaker’s car sales volume in 2024 must be of zero-emissions vehicles (10% for vans), with the quota ratcheting up each year toward a goal of 80% for cars by 2030 (70% for vans).
Manufacturers face penalties of £15,000 per car if they fail to meet the targets, though low-volume manufacturers with fewer than 1,000 sales a year are likely to be exempt.
There could be slight tweaks to the scheme – a target of 50% by 2028 may be hard to achieve, for example. But further reductions in the numbers of non-ZEV cars between 2030 and 2035 are likely to be introduced.
So consumers expecting a full range of petrol and diesel vehicles to be on sale between 2030 and 2035 will be disappointed. Manufacturers will only be able to offer one in five vehicles as non-ZEVs from 2030, so supplies will be very limited.
It does mean that some vehicle types – mild hybrids, for example – will be allowed to continue for a further five years. Rather than only being able to sell PHEVs alongside ZEVs from 2030-35, manufacturers can now offer some other choices, but only in limited numbers.
In reality, automakers are likely to use their dwindling ICE quotas to offer cars at the extremes of the market, for example large vehicles suitable for towing, or entry-level city cars where it is difficult to break even on an EV thanks to the cost of batteries. In fact, most non-ZEV models still sold between 2030 and 2035 will, in all probability, be PHEVs, as currently planned.
Most automakers are unlikely to change existing plans to move toward an all-electric offering before 2030. Companies such as Volvo say they will end all ICE sales ahead of 2030. Indeed, only Toyota has welcomed the 2035 decision as “pragmatic”, as it suits the Japanese automaker to have more time to play catch-up after pursuing hybrid and hydrogen, not batteries, as its future powertrains for many years.
Ford has been the most vocal critic, saying that delaying the 2030 deadline would be a mistake, and hinting it could put UK investments at risk. Ford is planning to build an EV powertrain facility at Dagenham, currently an ICE facility, though it does not assemble any cars in the UK.
But Ford fears the decision will put the brakes on the EV market, making consumers believe that petrol and diesels will continue to be available, so there is no need to switch to EV. “The UK 2030 target is a vital catalyst to accelerate Ford into a cleaner future,” Ford UK chair Lisa Brankin said in a statement.
“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.
However, the decision does at least bring the UK back into line with the European Union on EV deadlines. Indeed, this entire mess could have been avoided completely if the decision to leave the EU had not been made in 2016.
The EU has taken its time to get its decision right, in stark contrast to the flip-flopping of the Conservative government and its ever-changing leadership.
In June 2022, after a considerable period of consultation and debate, the EU agreed a 2035 deadline for the end of ICE sales – including all forms of hybrids. This is basically where Sunak has positioned the UK, cancelling a policy defined by Boris Johnson. According to Downing Street sources, Sunak had disagreed with Johnson’s decision while Chancellor, preferring 2035 to remain as the deadline.
While PM, Johnson twice wound back the deadline – set initially at 2040 in 2017. In February 2019 he announced it would move to 2035, and again in November 2020, at the height of the pandemic, that it would be brought forward to 2030, a typically grandstanding move deigned to “put the UK on course to be the fastest G7 country to decarbonise cars and vans”.
However, a number of factors have influenced Sunak’s thinking, making the 2030 goal in his view unworkable. Installation of EV charging infrastructure is still lagging behind EV sales. The cost of living crisis is affecting new car sales. There are significant fears that a lack of cheaper locally-made EVs will open the market to Chinese dumping.
Crucially, as London Mayor Sadiq Khan’s ULEZ expansion has demonstrated, anti-car policies are a vote loser, costing Labour the Uxbridge by-election, ironically Johnson’s former seat.
Tory back-benchers have also had their say. Former party leader Sir Iain Duncan Smith has been calling for the deadline to be moved back, Speaking to Sky News, Sir Iain said the 2030 date was “plucked out of nowhere”, and warned that the UK risks “becoming even more dependent on China” for EVs.
He said: “China is ready to flood the market here with cheap electric cars… they produce far more batteries than the whole of Europe put together. They are going to dump those on us.”
He added: “We are rapidly becoming the only developed country in the world that is still clinging to an arbitrary target which we probably won’t make, and which is going to destroy much of our industry.”
Sunak described the decision to move the EV deadline to 2035 as “pragmatic, proportionate and realistic”, adding it would ease the burden on motorists during the cost of living crisis and align the UK with other countries.
He said: “The up-front cost still is high, especially for families struggling with the cost of living. Small businesses are worried about the practicalities, and we’ve got further to go to get the charging infrastructure truly nationwide. And we need to strengthen our own auto industry, so we aren’t heavily reliant on carbon-intensive imports from countries like China.”
Sunak said he believed that by 2030 most motorists will drive a zero emission vehicle, but he added it should be the consumer, not the government, that makes the choice on when to make the switch.
The deadline change makes him look like he’s on the side of the motorist, though in reality it seems the move will make very little difference to the model mix and volumes of non-ZEVs sold between 2030 and 2035.