17 Jul 2024
The voice of the independent garage sector

“Between a rock and a hard place:” ZEV mandate still in place despite 2030 ICE roll-back

The ZEV mandate, which requires that a proportion of new cars being sold are electric, with carmakers fined if they fail to achieve their quota, will still be enforced from January despite the 2030 internal combustion engine car sale ban having being rolled back to 2035, the government has confirmed.

From January, vehicle manufacturers will need to make sure 22% of vehicles sold are electric. This will rise every year to 2030, at which point the proportion that needs to be electric will hit 80%.

This could be difficult for carmakers to achieve, as Ian Plummer, Commercial Director of Auto Trader noted:“The ZEV mandate will be a stretch for the majority of manufacturers to achieve in its current form, as many are significantly behind where the government is telling them they need to be in terms of EV sales. Therefore, to close the gap and meet electric vehicle sales targets, car manufacturers will be forced to look at ways to stimulate consumer demand and it’s likely price will need to play a big part in this. Electric vehicles carry a hefty price premium, so if prices come down, they’ll suddenly become a far more attractive proposition for a greater pool of car buyers.

“Both industry and consumer confidence has been dented by recent announcements and so clarity and government cooperation will be vital as the next steps play out.”

There could be an impact on the work being done to plug the widening skills gap around EVs as well. According to IMI CEO Steve Nash, the detachment of the ZEV mandate from the ICE ban could have a negative impact on the sector: “Very quickly following Wednesday’s late afternoon pronouncement by the Prime Minister, the light dawned on those of us working in automotive that there was a serious disconnect. A sector that had already been working hard to overcome a lack of any clear strategy for the 2030 deadline now finds itself caught between a rock and a hard place.

“The shift to 2035 for the ban on the sale of new ICE vehicles will certainly dampen adoption of EVs. Yet manufacturers must still meet the ever-building UK ZEV target. It’s already causing concern for 2024 with demand unlikely to match the 22% target for all vehicle sales, with the potential consequence that manufacturers will simply reduce production/import of ICE vehicles in order to avoid the eye-watering £15,000 per vehicle fine. A dampening of the new car market as a whole is something we were all hoping we’d seen the end of since COVID.

“However, there’s another concern that has much more serious consequences for the UK automotive sector. The mixed messages employers and individuals who work in automotive are receiving can only serve to stultify the commitment to training that is fundamental to safe roads and sustained economic stability. It is very likely that fleet buyers – currently accounting for 50% of new EV sales – will be the mainstay of demand for the new drivetrain in the next few years, encouraged by corporate ESG targets and a long-term view. But, if automotive employers and their workforce can’t see the immediate return on investment of EV training because of lack of consumer buying confidence, the already critical skills gap will only widen and we could find the wait times for repairs extending even further than they are already. That can’t be good news for the UK economy and social mobility.

“The fact of the matter is that the automotive aftermarket must stay focused on upskilling for EVs; it also needs to maintain continuous professional development for ICE vehicles. The franchised sector probably has the greatest motivation to keep their foot on the pedal on both technologies. However, when it comes to independent garages there will, understandably, be considerable nervousness to commit training to a drivetrain that could easily be 10 years down the road before it comes through their doors.

“Busy as a consequence of the pandemic, with the average age of vehicles in the parc increasing to 10+ years, and facing a significant skills gap, they are already struggling to manage demand. As such, there’s little reason for them to prioritise training right now on electric vehicles.”

Steve added: “It’s imperative, therefore, that having made this monumental decision to u-turn on the 2030 target, the government thinks very carefully about how it ensures UK infrastructure remains effectively supported by the automotive aftermarket.”