Comment on SMMT zero emission vehicle plan

“80% of cars built in the UK are exported. Of these, 71% go to three large markets – the EU, China, and 16 US states – that are introducing EV targets that will heavily restrict the sale of petrol and diesel vehicles.

“If the UK fails to respond to these changes in demand and develop its EV manufacturing base, our analysis suggests that the UK could lose £13.3bn of car exports in 2030 alone – a collapse in export revenue of nearly 60%, putting hundreds of thousands of British jobs at risk [2].

“While the US and EU are spending billions in their race to turn their car industries electric, the UK is yet to stump up the cash incentives, tax cuts or regulatory reform to retain and attract businesses rushing to take advantage of the incentives on offer elsewhere. The Government’s response to the US’s Inflation Reduction Act is now not due until the Autumn.

“Before then the Government could send a clear signal of intent to support the electric transition by finalising its Zero Emission Vehicle Mandate – targets increasing year on year for the minimum percentage proportion of zero emission vehicles that a car manufacturer has to sell – which is due to be confirmed in the next couple of months [3].”

The UK exported 606,838 cars in 2022 and manufactured 73,600 EVs.

Previous ECIU analysis found that a slower roll-out of electric cars under the UK’s proposed UK Zero Emission Vehicle Mandate would see a smaller pool of second-hand EVs leading to buyers paying an extra £9bn in the coming years to run more expensive small to mid-sized petrol cars [4].

There are almost 20,000 businesses currently within the net zero economy which are contributing £71 billion (3.7%) in Gross Value Added (GVA) to the UK economy [5].