18 November 2020.
The UK Government announced today that the sale of new petrol and diesel cars and vans will be banned from 2030. A ban on hybrid vehicles will be introduced five years later. The move brings forward a 2035 deadline announced earlier this year, and is part of what the Government calls a “green industrial revolution” to reduce emissions and create jobs in green industries.
Environmental campaign group Greenpeace welcomed the new deadline, saying it will create 32,000 new jobs across a range of sectors. The group also estimates that bringing forward the ban will ensure that there are 6.5 million more zero emissions vehicles driven in the UK by 2040.
According to trade body the Society of Motor Manufacturers and Traders (SMMT), 66,611 new electric cars had been sold in the UK between January and September 2020. Although this is an increase of 165% year-on-year, electric cars still only accounted for 5% of total car sales. Clearly, there is some way to go to convert all sales to electric models by 2030. Bearing this in mind, what’s been the reaction from the industry?
The response of car manufacturers varies according to their strategy on electric vehicles. For instance, Bentley recently announced that it would sell only electric cars from 2030. Bentley chairman Adrian Hallmark therefore welcomed the news and added: “We also acknowledge the government’s new ambitious yet necessary targets and timelines, and the focus now needs to shift onto creating and implementing a cross-industry plan to bring infrastructure and customers along on this important journey. Bentley is ready to transform itself and support the wider UK mission to meet this challenge.”
Other manufacturers point out the scale of the task involved. Steve Norman, Vauxhall’s managing director, told the BBC that the 2030 date was “a little bit tighter than we were expecting” but added that “plans are in place to meet that goal – and meet it we’re going to have to”.
AA president Edmund King said: “[The] 2030 target is incredibly ambitious, but the transformation to electric cars is welcome. If we can tackle the issues with considerable investment and focus, the electric revolution will flourish.” The response from the RAC flags some of these specific issues. As the organisation’s head of roads policy, Nicholas Lyes, puts it: “The car industry clearly now faces a monumental challenge to change its production lines, and electric vehicle charging infrastructure will need to be expanded at an incredible pace to cope with the surge in electric vehicles coming on to our roads.” He cites the need for many more rapid charging devices, a reliable charging network and a dramatic reduction in upfront vehicle costs.
Lyes also notes the likely impact on revenue from fuel duty: “The Government also now needs to work out how it’s going to plug the inevitable hole in fuel duty revenue that the switch to EVs [electric vehicles] will create. Currently, it collects around £28bn a year from fuel duty so the Treasury will need to quickly devise a new system that is fair for all drivers.” A pay-as-you-drive system is gathering momentum as an increasingly likely solution.
Mike Hawes, the chief executive of the SMMT, says that the new deadline “sets an immense challenge”. He says, “success will depend on reassuring consumers that they can afford these new technologies, that they will deliver their mobility needs and, critically, that they can recharge as easily as they refuel.” He also emphasises the opportunity for the creation of jobs in the UK and the safeguarding of UK automotive manufacturing.
Anticipating these concerns, prime minister Boris Johnson wrote in the Financial Times that the government will “invest more than £2.8 billion in electric vehicles, lacing the land with charging points and creating long-lasting batteries in UK gigafactories.” The £2.8 billion investment includes £1.3 billion investment to roll-out charging points “in homes, streets and on motorways across England”. The government also plans to provide £582 million in grants to buyers of zero- or ultra-low-emissions electric vehicles. There will also be £500 million invested in the development of mass-scale electric vehicle battery manufacturing in the UK.
However, the budget has attracted criticism. Shadow business secretary Ed Miliband said that the funding “in this long-awaited” announcement does not “remotely meet the scale of what is needed” to tackle the climate crisis. “Only a fraction of the funding announced today is new”, he said.
And the Green Party’s Caroline Lucas told the BBC that the plan “completely fails to rise to the gravity of this moment. When you put it in the context of the scale of the climate and nature emergencies that we face, and indeed the scale of the job emergencies that we face, then it’s nowhere near ambitious enough, it’s not urgent enough, it’s not bold enough.”
The new deadline has created some big challenges for car manufacturers and infrastructure owners alike. It remains to be seen whether there is the political will to give sufficient help to the industry.