Electric Vehicle Industry Warns: Job Security Hangs in the Balance Without Increased Demand

If the demand for electric vehicles (EVs) doesn’t increase, it could jeopardize automotive jobs in the UK, warns an industry group.

Mike Hawes, CEO of the Motor Vehicle Manufacturers Society and Trade Association The SMMT cautioned about the risk of "deindustrialization" should additional support for electric vehicle purchases not be implemented.

He characterized the move to eliminate EVs' exemption from vehicle excise duty along with the high-end car levy as "barriers" discouraging individuals from transitioning to electric vehicles.

According to the zero-emission vehicles (ZEV) mandate, each manufacturer selling new cars in the UK this year needs to ensure that at least 28% of their sales consist of zero-emission vehicles, typically referring to fully electric ones.

Last month, the market share for purely electric vehicles stood at 25.3%.

Failing to comply with the directive or utilize flexibilities—such as purchasing credits from competing firms or increasing sales in subsequent years—will lead to an obligation to make payments. Government $20,000 for each vehicle sold over the limit that emits pollution.

Mr. Hawes stated, "It’s crucial for us to explore all possible avenues to boost this demand since the impact of the current regulatory structure and our failure to comply with it can now be observed through declining sales figures, reduced production levels, closures or consolidations of facilities, and job losses."

“No one desires that outcome since it ought to stimulate economic growth rather than cause deindustrialization.”

Next month, Stellantis plans to shut down its van manufacturing plant in Luton, Bedfordshire, affecting approximately 1,100 jobs.

The SMMT's modeling indicates that reducing the VAT on new electric vehicle purchases by half could increase the market by an additional 15% compared to current projections, resulting in a total of two million new vehicles. EVs by 2028.

This would incur an upfront expense for the Treasury Around £1,000 per vehicle, according to the SMMT.

However, when paired with adaptable regulations and compulsory installation of charging stations, this approach could lead to advantages like boosting business for charge point providers, insurers, maintenance services, and various other industries, all while cutting down on vehicle emission levels, as stated by the automobile association.

A study conducted for the SMMT revealed that only 11.6% of individuals purchasing new cars plan to make the transition to electric vehicles within the upcoming three-year period.

But nearly two in five so-called electric sceptics said they would change their mind with a purchase incentive.

Mr. Hawes mentioned that investments from manufacturers indicate "there are 10 times more drivers using electric vehicles than there were just five years ago."

He continued, "This represents significant advancement; however, with adequate backing for customers, we have the potential to surpass present benchmarks and get over two million additional electric vehicles on the streets by 2028."

Public funding to win over the skeptics of electrification would invigorate businesses nationwide, extending well past the automotive industry.

Each participant would gain from the effect of customer incentives. When these incentives are coupled with mandatory goals for expanding charging stations and more adaptable regulations, they can generate a positive cycle where increasing demand drives sustainable economic expansion.

The ZEV mandate percentages increase annually, hitting 80% of new vehicles by 2030.

The government is currently reviewing comments gathered from a recent consultation about potential rule modifications. These alterations might make it simpler for manufacturers who do not comply with regulations to evade penalties.

Previously, it pledged to overturn former prime minister Rishi Sunak’s choice in September 2023 to push back the ban on selling new petrol and diesel cars and vans from 2030 to 2035.

Mr. Hawes additionally mentioned that the automotive sector "does not wish to witness an escalation in tariffs," following comments from the President. Donald Trump imposed a 25% tariff on goods coming from the USA.

He commended the Government for responding "with great composure," and added, "Let's hope cool heads will prevail."

The poll of 2,000 UK residents planning to purchase a new vehicle within the next three years was carried out by Censuswide earlier this month.

To get the finest tales delivered to your inbox daily, click here. here to sign up for one or more newsletters from The Standard.