CashNews.co
Plans for boosting the number of electric vehicles in the UK are not working as intended, the Business Secretary has said on the day Vauxhall’s owner announced it would close its factory in Luton.
Jonathan Reynolds told car manufacturers on Tuesday night he was “profoundly concerned” about how policies meant to phase out new petrol and diesel vehicles by 2030 were operating, and would consult on “a better way forward” while still keeping the target.
His comments in a speech to the Society of Motor Manufacturers and Traders (SMMT) follow Vauxhall-owner Stellantis’s announcement that it will close its van-making plant in Luton, putting 1,100 jobs at risk.
The closure forms part of the group’s proposal to consolidate its UK manufacturing of vans to create an all-electric hub at its Ellesmere Port plant in Cheshire, where it is set to invest £50 million.
Stellantis said the decision was made within the context of the “stringent” UK zero-emission vehicle mandate.
SMMT chief executive Mike Hawes said the news from Stellantis along with Ford’s recent decision to cut 800 jobs from its UK operations over the next three years showed times were “very tough”.
He said: “We’ve seen announcements globally of production cuts, profit warnings, job losses and the UK was never going to be immune.
“A new announcement last weekend and, regrettably, today, are not just a sobering reminder of the challenges the industry faces, but most importantly, of worrying and grave concern for the livelihoods of so many.”
Alongside its annual dinner on Tuesday, the trade body also warned that the pace of the transition to electric vehicles could “devastate” the automotive industry as demand for zero emission vehicles “failed to meet ambition”.
Under the zero-emission vehicles (Zev) mandate, at least 22% of new cars sold by each manufacturer in the UK this year must be zero-emission, with the threshold rising each year.
Under the current rules, the mandate will reach 80% by 2030, but the Government has committed to bring the ban on the sale of new petrol and diesel cars and vans forward from 2035 to 2030, reversing a change introduced by Rishi Sunak’s government last year.
In his speech to the SMMT, Mr Reynolds said the Government was “absolutely committed” to the 2030 target, but had “heard you loud and clear on the need for support to make this transition a success”.
Announcing a “fast-track” consultation on changes to the Zev mandate, he said he was “profoundly concerned” about how the policy was operating.
He said: “I’m going to be frank with you – I don’t believe the policies that we have inherited, and I mean specifically in relation to zero-emission vehicles, are operating today in a way anyone intended them to.”