Britain’s automobile trade body Friday asked the country’s new government for greater support to boost sales of electric vehicles, saying manufacturers’ collective discounts this year worth £2 billion ($2.6 billion) were unsustainable.
In an open letter to finance minister Rachel Reeves, the Society of Motor Manufacturers and Traders (SMMT) said EVs’ share of new car sales was set to miss out on the Labour government’s zero emission vehicle target this year — despite a record September.
‘Unfortunately, the private consumer has no fiscal incentive to switch and so our ZEV market looks set to miss its target,’ said an open letter co-signed by the UK heads of auto giants including BMW, Ford and Mercedes-Benz.
‘The consequences of this will not just be environmental but economic,’ the letter added, signed by other carmakers including Jaguar Land Rover, Kia, Nissan, Vauxhall-maker Stellantis and Volkswagen.
Britain’s car manufacturing industry is dominated by foreign players, whose UK-made vehicles are mostly exported.
UK automakers on Friday forecast new EV sales in the UK will account for 18.5 per cent of car sales by the end of the year, below the previous Conservative government’s 22-per cent target.
This despite September being a record month in terms of new battery EV car registrations, ‘driven by massive manufacturer discounting’, SMMT said in data published alongside the letter.
‘Despite manufacturers spending billions on both product and market support — support that the industry cannot sustain indefinitely — market weakness is putting environmental ambitions at risk and jeopardising future investment,’ said SMMT chief executive Mike Hawes.
Manufacturers are required to pay the government £15,000 per polluting vehicle sold above the limits, or purchase credits from rival companies.
Ahead of the government’s maiden budget on October 30, car manufacturers used their letter also to call on Reeves to provide more incentives to drive EV sales, including halving value added tax on new purchases and slashing VAT on public charging points.
‘We appreciate the severe constraints on the public purse, but deliver this support to consumers and the benefits are myriad,’ the letter said.
The government made no comment regarding any planned changes.
The wider car industry has struggled to drive EV sales in the face of tough competition from Chinese automakers.
EU countries on Friday gave a definitive green light to hefty additional tariffs on electric cars made in China, despite strong opposition led by Germany amid fears it will spark a trade war with Beijing.
