The Labour Party government is facing renewed pressure to reaffirm its commitment to the 2030 ban on new petrol and diesel cars. The Society of Motor Manufacturers and Traders (SMMT) has called on the government to eliminate barriers to electric vehicle (EV) adoption, citing changing economic conditions that make it harder for consumers to switch.
SMMT Chief Executive Highlights Challenges
Mike Hawes, chief executive of the SMMT, noted that energy costs have risen significantly since the outbreak of the war in Ukraine and have remained elevated. "Energy costs were much, much lower than they are now, but they have shot up and remained higher," he said.
Under current regulations, legally binding targets require car and van manufacturers to sell a certain proportion of EVs or face fines. The mandate stipulates that 80% of cars sold by 2030 must be electric, rising to 100% by 2035.
Obstacles to EV Adoption
Mr. Hawes explained that when the mandate was introduced, it was done with the best intentions. However, assumptions about cost parity between EVs and internal combustion engine vehicles have not materialized. "It was assumed that EVs and ICE vehicles would be at price parity by now. We're not, and most forecasts suggest it's probably going to be about 2030 before we get to cost parity," he said.
He highlighted that battery costs are 31% higher than anticipated, and public charging costs are 140% higher than five years ago. "With those sorts of obstacles, it's that much harder to get the entire market to move," he added.
Call for Review
As a result, the SMMT is calling for a review of the regulations to better reflect current market realities. Mr. Hawes stated that the mandate should be adjusted to "reflect natural demands more in terms of where the regulation is."
