Government advisers say EV sales targets will be hit: comment

Responding to evidence given by the Climate Change Committee in Parliament confirming that the car industry is on track to hit its EV sales targets in 2024 Colin Walker, Head of Transport at the Energy and Climate Intelligence Unit (ECIU), said: “With official Government advisers now also saying the car industry is likely on course to hit its EV sales targets in 2024 [1], claims to the contrary are becoming increasingly questionable. The narrative that has been pushed that sales aren’t on track appears to be wrong.

“The reality is that the mandate appears to be working. Many manufacturers are meeting, and even exceeding, their EV sales targets. And with manufacturers competing for sales to hit these targets by bringing the prices of their EVs down, UK consumers are benefiting from lower costs and are buying EVs in record numbers.

“The warning that carmakers that don’t embrace EVs could go the way of the way of Blockbuster and Kodak is a reminder of what is at stake if our car industry is unable to make a rapid transition to building the EVs of the future. [2] Analysis by CBI Economics has shown that a failure to move forward with electrification could see the car industry’s economic output collapse by 73%, or £34bn, and over 400,000 jobs could be lost. Conversely, embrace electrification, and our car industry’s economic output could increase by £16bn, or 35%, and 167,000 new job could be created. [3]

“The fall in UK car production in October is attributable in part to the retooling of UK factories to produce new, electrified vehicles. [4] With global EV sales heading in only one direction, up, this is a move the industry needs to make if the UK is to build the electric vehicles that our major export markets are increasingly demanding. The challenge for Government is to put in place the industrial strategy that will help the car industry make this transition. The Government may well also decide to support the industry by incentivising more EV sales in UK, which could have the effect of enabling more families to enjoy the savings that come from EV ownership”.

It has been repeatedly reported that the car industry is struggling to hit its 22% EV sales target for 2024. However flexibilities built into the regulation mean that many manufacturers do not have to hit 22% to be compliant with the regulation. Manufacturers that produce a large number of relatively low-CO2 producing petrol and diesel vehicles can generate extra credits that they can use to hit their EV sales targets. For example New Automotive has estimated that Toyota will only need to hit 10.9% EV sales in 2024 to be compliant and has estimated that the industry, as a whole, will only need to hit 18.1% sales. [5] With sales forecast to reach 18.5-19% for the whole of 2024, far from falling short the industry is in fact on course to exceed the target it needs to reach.

The claim that the EV sales targets are to blame for the closure of Vauxhall’s factory are misleading for a number of reasons:

• As reported by the COO of Nissan at the time that Nissan’s vans were built at Vauxhall’s Luton factory, there has been considerable uncertainty over the future of this factory for decades. The EV sales targets only came into effect in 2024. [6]
• Two months before it announced the closure of its Luton factory, The owner of Vauxhall told investors that it was “confident” it would meet the UK’s rules on electric vehicle sales. These comments undermine claims that these targets are to blame for the decision to close the factory. [7]
• In May 2023, Stellantis said Brexit had put jobs at the plant in jeopardy, warning that higher tariffs on exports to Europe following Brexit could put jobs in jeopardy. [8]
• The majority of the vans made by Stellantis are exported, rather than sold in the UK. They are not affected by the Government’s EV sales targets. [9]
• Stellantis’ recent difficulties are well published. Sales of their Ram trucks in the states, one of their main profit drivers, are down 24%. Their share price has fallen by 45% in 2024, and they have seen five consecutive quarters of falling sales.  A number of senior executives have been removed from their posts. [10] Their North American COO Carlos Zarlenga is being replaced after 8 months in the role, while their global CFO Natalie Knight is leaving after 15 months with Stellantis. The organisation’s CEO Carlos Tavares has announced that he will be standing down in 2026. [11] These challenges will have driven the decision to close the Luton factory, rather than recently introduced EV sales targets.

ENDS

Notes to editors:

[1] https://inews.co.uk/news/politics/cash-grants-to-buy-electric-cars-not-ruled-out-in-bid-to-boost-sales-3403751  
 
[2] https://www.yahoo.com/news/carmakers-don-t-embrace-evs-185209990.html
 
[3] https://eciu.net/analysis/reports/2024/electrifying-growth
 
[4] https://www.bbc.co.uk/news/articles/ce9gk05d3jjo
 
[5] https://static1.squarespace.com/static/5e753d15b0eb84693c7e3e21/t/6728f30d9a50df3e7aa4a391/1730736929324/Electric_Car_Count_OCTOBER_2024.pdf
 
[6] https://x.com/SkyNews/status/1861459784731381761
 
[7] https://www.theguardian.com/business/2024/nov/27/vauxhall-owner-was-confident-about-meeting-ev-rules-before-factory-shutdown?CMP=share_btn_url
 
[8] https://www.bbc.co.uk/news/uk-england-beds-bucks-herts-66126185
 
[9] https://www.bbc.co.uk/news/uk-england-beds-bucks-herts-66126185 
 
[10] https://www.am-online.com/features-landing/executive-view-why-wartime-ceos-are-currently-the-best-fit https://www.youtube.com/watch?v=PNYMEH-dOA4
 
[11] https://www.autonews.com/automakers-suppliers/jeep-boss-replaces-carlos-zarlenga-stellantis-na-coo/

For more information or for interview requests:

George Smeeton, Head of Communications, ECIU, Tel: +44 (0)7894 571 153, email: george.smeeton@eciu.net