UK carmakers warn they may miss government targets on EV sales

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UK carmakers warn they may miss government targets on EV sales
UK carmakers warn they may miss government targets on EV sales

Industry downgrades forecast for sales of battery vehicles after 18.8% rise in July on a year earlier

The UK car industry has downgraded its forecast for electric vehicle sales this year in the latest sign of pessimism in the industry over its ability to meet government targets for shifting away from fossil fuels.

The number of battery EVs sold in the UK in July rose by 18.8% on the figure a year ago, according to data published on Monday by the Society of Motor Manufacturers and Traders. 

However, the lobby group said sales would grow more slowly than expected for the rest of the year. In April, it forecast that battery cars would account for 19.8% of sales during 2024, while it now puts that figure at 18.5%.

Some manufacturers are worried they will miss EV targets set by the UK government. Under the zero emission vehicle (ZEV) mandate, 22% of each carmaker’s sales must be pure battery cars in 2024, rising to 80% by 2030. However, manufacturers receive some exemptions for selling other types of car, and they can also borrow credits from other manufacturers.

The mandate is meant to push manufacturers to accelerate EV sales before a total ban on cars that emit carbon dioxide. Labour has said it will reintroduce a plan to ban new petrol and diesel car sales in 2030, after the former prime minister Rishi Sunak delayed it until 2035.

Mike Hawes, the SMMT’s chief executive, said the sector was resilient, given that UK sales had risen 5.5% this year compared with the first seven months of last year. However, he said he was worried that the industry would not meet the government’s targets.

“Weakening private retail demand, particularly for EVs and despite generous manufacturer discounts, is the overriding concern,” Hawes said. “More people than ever are buying and driving EVs but we still need the pace of change to quicken, or else the UK’s climate change ambitions are threatened and manufacturers’ ability to hit regulated EV targets is at risk.”

Carmakers have continued to sell mostly petrol and some diesel cars because they remain more profitable to make than battery cars, particularly as slowing demand and rapidly increasing competition from new Chinese entrants has put pressure on electric car prices.

Some carmakers have played hardball with governments in the UK and EU over emissions regulations. Stellantis, the owner of brands including Fiat, Peugeot and Vauxhall, claimed in June that it could close British factories if the UK government did not loosen sales regulations, despite most of its products being due for export.

Overall, UK car sales have grown year on year in every month for the last two years as the industry recovered from the slump in sales during the pandemic. There have been 1.15m sales so far in 2024, 60,000 more than last year.

However, a slowing global economy and higher interest rates have weighed on sales growth. The SMMT also downgraded its expectations for petrol and diesel sales. The lobby group expects 1.97m car sales this year, down from its 1.98m forecast in April.

Thomas Brown

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