23 Feb 2024

Government rolls ICE ban back to 2035

The rolling-back of the internal combustion engine deadline to 2035 by the Government met a mixed reaction from the automotive sector

The ban on the sale of new internal combustion engine (ICE) vehicles, which had been set to come into force in 2030, was shifted back to 2035 by Prime Minister Rishi Sunak on Wednesday 20 September.

With infrastructure lagging behind adoption, and EVs still higher in price than ICE equivalents, the announcement was one of a number he made designed to ease the financial pressure on households, including a similar push-back on the ban on gas boilers for homes, which has also been pushed back to 2035.

Commenting on the measures, the P.M said: “This country is proud to be a world leader in reaching Net Zero by 2050, but we simply won’t achieve it unless we change. We’ll now have a more pragmatic, proportionate, and realistic approach that eases the burdens on families, all while doubling down on the new green industries of the future. In a democracy, that’s the only realistic path to Net Zero.”

Commenting on the potential impact on the shift to EVs, SMMT Chief Executive Mike Hawes said: “The automotive industry’s commitment to a zero-emission new car and van market remains unchanged. Net Zero cannot be achieved without this sector’s decarbonisation. The Prime Minister has confirmed that a mandate to compel the sale of EVs – the single biggest mechanism to deliver Net Zero – will be published shortly, starting in January 2024. Manufacturers will continue to put innovative new models on the market but consumers need encouragement to buy more than ever. Today’s announcement must be backed up with a package of attractive incentives and measures to accelerate charging infrastructure to give consumers the confidence to switch. Carrots move markets faster than sticks.”

Transport research group New AutoMotive helped to bring the UK ICE ban forward from 2040 to 2030. CEO Ben Nelmes said: “Pushing the ban on buying petrol and diesel cars back to 2035 is an abdication of leadership that motorists will pay the price for. It sets us back in the global race to develop green industries – a huge own goal by the UK. It’s also a hammer blow to the UK’s leadership on climate change. Despite what the Prime Minister has claimed, it will be harder to meet our legally binding emissions targets.

“He is right to say that electric car prices are dropping and charging infrastructure is improving – but this is thanks to the industry investing billions of pounds working towards the 2030 target. Pushing the date back will raise costs for motorists by deterring future investment in the UK EV industry and supply chain.”
Ben added: “It will restrict job creation, weaken energy security and lead to higher energy bills for longer for everyone. It removes a key pillar of the current government industrial policy of green growth, reversing the work of the last decade.”

Pace of transition
National Body Repair Association (NBRA) board member Wayne Mason-Drust, said: “By shifting the goalposts, the Government puts at risk the investments made by businesses in our sector who took early steps to adapt to a greener automotive landscape. These businesses now face an extended period before they can see a return on their investment, raising questions about the economic viability of their proactive efforts.”

Wayne added: “A graduated approach to discouraging petrol and diesel vehicle sales, perhaps through incremental EV grants, can stimulate a more manageable, gradual shift towards electric vehicles. Increased public investment in EV charging infrastructure is vital, making it easier for consumers to adapt and thus quickening the overall pace of transition.”

As IMI CEO Steve Nash noted, the motor industry has made a significant investment in the shift to EVs, which he says this delay could derail: “The announcement by Rishi Sunak, whilst not surprising, significantly under-estimates the hard work and commitment those in the automotive sector have already shown to meet the 2030 target. There’s now a serious risk that businesses and individuals will take their foot off the pedal and the great success the IMI has had in engaging the industry to commit to investment in EV skills will lose momentum.
“The deadline shift also demonstrates a distinct lack of understanding of the pressures a multi-technology vehicle parc places on the automotive workforce. The upskilling that has already taken place has come at a financial strain which businesses and individuals have justified because of the expected increased EV adoption. Even if EV uptake slows over the next few years, there will still need to be a concerted focus on upskilling to meet the needs of the growing parc as well as other emerging technologies such as connected and autonomous. However, with the ICE vehicle parc not diminishing as had been previously expected, the skills to work on petrol and diesel vehicles will also need to be maintained. This multi-technology pressure could undermine access to competent and fairly priced aftermarket services as a whole, not only threatening road safety in general but hitting those struggling with cost of living pressures hardest – the very group the government’s announcement is allegedly designed to help.”
Steve added: “It is absolutely crucial that the shift to 2035 is not seen as a ‘free pass’ to delay investment in infrastructure and training. Therefore, having made this change, the Government must now understand the multiple challenges the sector faces and provide the right support to ensure the UK economy and wider society can continue to rely on the automotive sector. We look forward to working with government to inform and understand how this can be achieved.”

Clear strategy
NFDA Chief Executive Sue Robinson said: “The announcement to delay the sale of new petrol and diesel vehicles from 2030 to 2035 is unsurprising given the Government’s inertia around driving EV adoption in the UK. This change will likely create further uncertainty for the industry, however, it does align the UK automotive industry with the European Union, its largest international trading partner, and automotive dealers support this.”
The NFDA undertook a survey of its dealer members in August, which found 59.7% believed that the UK should aim for a 2035 ICE ban, in line with the EU’s goals. Sue added: “Ultimately, the phasing out of ICE vehicles in the UK requires a clear strategy from the government to achieve it, it must be supported by forward thinking legislation and attractive initiatives to encourage motorists in making the shift. If the UK is to reach its 2050 net-zero targets it needs to support the automotive industry, now more than ever.”

Transition
Simon King, Interim CEO at Autotech Group, noted: “During his speech, Prime Minister Rishi Sunak commented that, as a country, we need to strengthen the automotive industry. For several years Autotech Training has highlighted the need for greater education and training on Electric Vehicles.

“EV training isn’t purely for the vehicle technicians who are responsible for repairing and maintaining them, but anyone who works or operates them, including the customer who drives their new EV off the forecourt, needs educating. Not only for their safety, but to understand how to drive them efficiently. Fleet companies, along with local authorities and the emergency services have invested heavily in electrification and will undoubtedly continue to build on this electric future while vehicle manufacturers, who have made firm commitments on when they will move to fully zero-emission cars, have said they will not deter from these planned dates. Therefore, despite the Government moving its climate commitments, the aftermarket cannot afford to become complacent.”

Simon added: “The fact is there are more electric vehicles on the road today than there are people trained to work on them. It is imperative that we continue pushing forward with plans to upskill technicians and educate the wider public on EVs – this will not only lead to a stronger automotive sector but ensure that everyone has the right knowledge to make the transition safely and successfully.”

Monumental challenge
John Wilmot, CEO at car leasing comparison website LeaseLoco, observed: “The announcement won’t have come as a huge surprise within the industry. The 2030 target was always ambitious, but it’s become more evident in the past 12 months that it’s simply not achievable with battery production unable to meet the vehicle unit production required to hit the deadline.

“While this is going to be an unpopular decision amongst many groups, it’s better that the Government accepts 2030 is unrealistic and calls it six years early, rather than leaving it to the last minute and creating a full-blown panic. Consumers aren’t stupid. The cost of electric cars is too high and the public charging infrastructure rollout is well behind schedule. This has inevitably had an impact on people choosing to switch to electric cars now, with demand showing signs of stalling in recent months. On our platform we have seen EV sales drop from 31% of all sales in Q1 2023, to 23% in Q3 2023.”

He added: “The Government has given itself some breathing space, but it still has a monumental challenge on its hands to convince the British public to embrace green motoring.”

Hybrid approach
Gordon Balmer, Executive Director of the Petrol Retailers’ Association (PRA), said: “The Prime Minister’s announcement reflects the reality of the delays in meeting infrastructure targets. The widespread adoption of electric vehicles in the UK can’t be realistically achieved without the corresponding charging network to accommodate it. Delays in infrastructure targets and questions around alternative methods of tax to compensate for the loss of fuel duty revenue and VAT have cast a shadow over the 2030 deadline.

“Our members are committed to the decarbonisation of transport and are installing charging points to support an uptake of electric vehicles. We have called on the Government to provide support and direction concerning the critical issues of connecting to the grid and delivery of the required electricity to support the infrastructure. The PRA has consistently argued that the ban on new ICE vehicles by 2030 is a date without a plan and we hope the movement of the date to 2035 will allow us to continue to work with the Government on a sensible strategy to decarbonise transport.”

“The PRA agrees with the Transport Select Committee’s findings in their document ‘Fuelling the future, motive power and connectivity’ which stated the Government have put all of their eggs in one basket with electric vehicles. Instead of gambling our hopes for successful decarbonisation away on unrealistic mandates, they should instead be focusing on more pragmatic options.”

Elephant in the room
LKQ Euro Car Parts CEO Andy Hamilton acknowledged the negative reaction on the announcement expressed in some parts of the industry, but acknowledged that there are wider concerns: “There’s palpable anger in the automotive industry at the Government’s decision to push back the ICE ban to 2035. If not for its diluting of key climate change policy, then for how it could damage investment appetite in the UK.

“But, in the last year, the elephant in the room has been the question of whether the UK will be ready by 2030. Some of the biggest critics among vehicle manufacturers to yesterday’s news had also been loud voices on the uphill battle 2030 represented. There continues to be a massive shortfall in charging point infrastructure, with millions of people in towns and cities without a driveway for which to charge. The same goes for businesses with large fleet or logistics operations. EVs also remain expensive for most consumers too, despite prices moving in the right direction with a growing second-hand market.

“Some independent garages have struggled to grapple with the cost of retooling and upskilling staff to provide a full service for EV motorists. The announcement could provide light relief, giving garages more time to raise the necessary capital to effectively invest in the transition.

“Investing sooner rather than later will still be important for garages to retain customers making the switch to a plug-in. Government support will be important for this journey, as will garages’ communication with new and existing customers about their EV capabilities.”

Andy added: “Whether the date is 2030 or 2035 may be beside the point. What we’ve lacked over the last few years is the strategic vision by Government to deliver on a challenge like the ICE ban. Without this direction, then 2035 risks representing a new arbitrary deadline.”

Reality check
According to IGA Chief Executive Stuart James, shifting the deadline will mean a bigger window to make sure infrastructure is in place, and provide more time for the range of EVs to widen, offering more choice and reducing the price gap: “The announcement by the Prime Minister represents a reality check that the infrastructure required to support wholesale EV adoption in the UK is currently lagging behind where it would need to be, had the 2030 ban remained in place.

“In the current challenging economic climate, to impose the high cost of new electric vehicles on businesses and consumers, would be a step too far, so pushing back the ban date 2035 is the right thing to do.”

“To ensure that the new 2035 goal is achieved, there needs to be Government support not only for the required infrastructure, but also for upskilling of staff across the independent automotive sector, in order to provide consumers with the confidence that making the change to electric vehicles, is backed up with an accessible network of local, competent garages to meet the changes in their motoring needs.”

Greater role
According to IAAF CEO Mark Field, the Government needs to enter into an ongoing dialogue with the automotive aftermarket on the Net Zero issue, in the light of the rollback on the ICE deadline. He said: “IAAF is calling on the Government to listen to the concerns of the automotive aftermarket and allow it to play a greater role in the consultations on Net Zero. The aftermarket industry is the leading provider of service, maintenance, and repair of the 34 million vehicles on UK roads, so it needs to be part of the discussion.”

During meetings between the IAAF and the Minister of State for Transport, it was confirmed that second-hand ICE vehicles are expected to remain on the roads, which makes independent garages a key factor for UK transport going forward. Mark observed: “Much has been made of the country’s triumphant road to an alternative-fuelled future, but the aftermarket, as the pinnacle of a circular economy that has been gearing up for a very diverse set of vehicles arriving on its shores for some time, yet again faces the goalposts being moved with little consultation.
“Everyone wants to do the right thing on climate change, but they don’t want to be unfairly penalised and faced with changing their mode of transport to a more expensive alternative at a time when the cost of living is so high. The issue is that without certainty and regular consultation, the automotive industry cannot appropriately plan for the future, whether that’s powered by petrol and diesel, electricity, or another alternative fuel.”

Mark added: “Future powertrain technology has not been fully considered amongst the discussion on banning new petrol and diesel vehicle sales, with hydrogen fuel cell technology also a viable option in the pursuit of a practical and pragmatic Net Zero solution.”

He concluded: “The delay proves that 2030 was simply a target, and in order to realistically achieve this then more discussion with the experts in service, maintenance and repair needs to happen.”