Car industry set to meet EV sales targets in 2024: analysis

“Suggestions that the car industry will be unable to hit the ZEV mandate target in 2024 are based on a misunderstanding of what the ZEV mandate target actually is. The previous Government, supported by the car industry, designed it to be achieved not only through the sale of EVs but also through the sale of large numbers of low emission petrol and diesel cars.
 
“The car industry as a whole is currently on track to meet the 22% target for 2024. The mandate is having the desired effect of driving down costs and driving up sales, enabling more families to get behind the wheel of cleaner, cheaper-to-run cars.
 
“Some manufacturers have been slow to wake up to the global shift towards EVs and are being left behind, but many - including BMW, Mercedes and Hyundai - are ahead of the mandate targets. Government may want to consider more incentives to enable even more households to go electric, but lowering the UK’s EV ambitions by weakening with the mandate would risk putting the UK car industry in the slow lane at a time when global competition is only hotting up, and stalling billions of pounds of investment in the UK’s charging infrastructure.
 
“Weakening the mandate will remove competition, prices could well increase, growth in EV sales will slow and expansion of the second hand EV market will be held back, leaving people stuck driving dirtier and more expensive-to-run petrol cars for longer.”
 
Ginny Buckley, Founder of Electrifying.com said: “This analysis shows that this key piece of legislation is having the desired effect. The ZEV mandate ensures that the car industry shifts away from fossil fuels, providing it with a clear direction and timeline to work from, allowing manufacturers to plan production, streamline supply chains, and invest in new technology effectively. 
 
“However, cars are only half the picture. Alongside this transition, there’s a race to build charging infrastructure and drivers need confidence that charging facilities are in place to encourage them to make the switch to electric vehicles viable.
 
“The charging industry is already investing billions of pounds, ahead of demand, and ensuring the infrastructure is ready. To support this level of investment, we need a structured framework for car sales, which the ZEV mandate provides.
 
“The mandate must also be paired with strong government support for charging infrastructure and incentives for private buyers. Still, I see no reason to dilute its ambition, particularly given the fact the industry is on course to hit the 2024 target.”
 
Andy Palmer, Founder of Palmer Automotive, said: “The ZEV Mandate is proving that demand exists for BEVs. However, it requires a price correction which is good news for consumers. The bad news for manufacturers is that they are forced to discount where their product offer doesn’t fit the market requirements. This is the challenge of management and product planners, but the challenger Chinese brands are leading the way.
 
"The ZEV is a clear policy signal for investors and any dilution could have a negative effect on the whole transition and hurt the autos even further. However short term help might be necessary to help laggard OEMs catch up.”
 
The competition between manufacturers to secure sales is driving down the sticker price for new EVs [5]. After 3-4 years, these new cars will enter the second-hand market enabling more households to access the cheaper running costs of EVs, given 80% of car sales in the UK are for used cars. [6] Analysis by the ECIU has found that the best-selling second-hand EVs of 2024 could save their owners an average of £1,600 a year compared to their petrol equivalents. [7]
 
A recent report by CBI Economics, commissioned by the ECIU, revealed that a failure by the car industry to make the transition to manufacturing EVs could see its contributions to the UK economy fall by as much as 73%, or £34.1bn, and over 400,000 jobs could be lost. Conversely, economic output could increase by over £16bn, and 167,000 new jobs could be created, if a rapid and successful transition takes place. Government support is critical in avoiding such an outcome, and this includes the provision of a stable and supportive regulatory environment through keeping measures like the ZEV Mandate in place. [8]
 
Ford has just announced that its Halewood factory will start production of electric power units for 70 per cent of the electric vehicles Ford will sell in Europe, securing 700 jobs. [9]
 
The recent closure of Vauxhall’s factory in Luton has been attributed by some to the introduction of the ZEV mandate. However, as the COO of Nissan at the time that Nissan’s vans were built at the factory has said, the future of the factory has been uncertain for a number of decades. [10] This included suggestions in 2023 that the factory would have to close as a result of Britain’s departure from the European Union, prior to the introduction of the ZEV mandate. [11] The owner of Stellantis has faced a number of challenges in recent years, including falling sales of petrol vehicles in the US, a share price that has fallen 45% in the last year, [12] and the resignation of its global CEO. [13]