Government Should Encourage EV Demand Instead of Penalizing Car Makers

The UK’s Zero Emission Vehicle (ZEV) Mandate: Unveiling the Truth

Explosive remarks from the CEO of Vertu Motors, one of the largest car dealer groups in Britain, have shed light on the state-imposed supply chain created by the ZEV mandate.

Robert Forrester, the CEO, claims that car manufacturers are intentionally withholding the supply of internal combustion engine (ICE) cars until 2025 in an effort to promote the adoption of electric cars.

According to the latest data from What Car?, the average discount on new electric vehicles (EVs) is nearly 10%, with Mazda offering the highest average discount of 25%, followed by Jeep at 21% and Audi at 15%.

Despite these significant discounts, private buyers are still hesitant to embrace EVs.

Forrester expressed his frustration, stating, “It’s almost as if we can’t supply the cars that people want, but we have plenty of the cars that maybe they don’t want.”

Car Makers Speak Out Against the ZEV Mandate

Car manufacturers are becoming increasingly vocal about their dissatisfaction with the ZEV mandate, questioning the gap between public demand and the legislated targets for EVs.

If the demand for EVs falls short, car manufacturers face fines for the shortfall in sales.

Stellantis CEO Carlos Tavares, whose brands are rapidly launching EVs at lower costs, has put his UK factories under review, citing the contradiction between producing vans in the UK and being subject to the ZEV mandate as unacceptable.

No Clear Winners in the Situation

It is difficult to determine who benefits from this situation. As Forrester highlighted, discounting erodes profitability for car makers, resulting in losses on EVs. Additionally, the government is losing out on VAT receipts and putting manufacturing facilities at risk by constraining the new car market.

Although EV sales saw a rise in August, this can be attributed to the atypical car sales pattern before the September number plate change. The Society of Motor Manufacturers and Traders has downgraded its forecast for EV sales in 2024, projecting it to fall below the crucial 22% mark.

Next year, the target increases to 28%, making the situation even more challenging. There is currently no indication of how things will improve before then.

Furthermore, the legislation cannot be reviewed until the end of 2026, and non-compliant car makers will be required to pay fines. Missed targets in one year can be carried over to the next for up to three years, accumulating interest.

Promoting a Positive Outlook for EVs

This pessimistic tone surrounding EVs has a detrimental effect on the market perception of these vehicles. However, the reality is that EVs are continually improving and becoming more affordable, making them suitable for a larger portion of the population than current demand suggests.

Instead of penalizing car makers, the government should focus on stimulating demand for EVs. By implementing measures to encourage adoption, the market for EVs can thrive, benefiting both car manufacturers and the government.