The United Kingdom presently has a mandate requiring over 22 percent of all new passenger cars sold by individual manufacturers to be “zero-emission vehicles” by the end of the year. While the nation has managed to achieve this in select months, it doesn’t look to be sustainable when averaged out to the full year. Consumer acceptance of all-electric vehicles seems to have peaked for the time being and the nation is starting to rethink its approach to EVs. But the goal isn’t to abandon the push toward alternative powertrains.
Business and Trade Secretary Jonathan Reynolds has stated that he wants to convene with automakers and environmental groups to find a solution that works for everyone, totally ignoring the fact that it’s ultimately the consumer that is supposed to determine what does and does not sell.
The UK government is reconsidering its electric vehicle targets after sustained pushback from its citizens. Ultra-low emission zones (ULEZ) have been decried as authoritarian, with opponents taking to cutting down enforcement cameras designed to penalize people caught driving the wrong type of vehicle. Meanwhile, automakers have been scaling back their electrification targets due to sales being less than hoped. In some cases, this has included reducing production and enacting widespread layoffs.
Vehicles that the government and automakers decided would underpin the future of motoring aren’t selling as quickly as either group hoped, despite massive incentivization and regulatory mandates. This comes at a time when most legacy automakers have had serious trouble making all-electric vehicles a profitable business. Now, we’re starting to see jobs receding — with Europe having already endured a steady decline of manufacturing jobs since 2018.
New vehicle sales have also been on a downward trajectory, with two-thirds of European nations seeing roughly a ten-percent decline in registrations this year. Modern vehicles (not just EVs) are simply too expensive and the market is responding. But the development of all-electric vehicles and advanced driving systems are helping to drive that price increase, as companies need to offset the massive development costs.
The resulting situation is now negatively impacting employment, with Bloomberg noting last week that the United Kingdom is mimicking most of its neighbors. Trade Secretary Reynolds is very aware of the issue.
From Bloomberg:
Reynolds spoke hours after Stellantis NV announced plans to close one of its van factories in the UK that employs around 1,100 workers. The owner of Vauxhall expects to shift production of electric vans from its plant in Luton, northwest of London, to its other factory in Ellesmere Port, near Liverpool.
Stellantis and almost all of its major European peers have issued profit warnings in recent months as a result of slowing sales, increased competition and a letdown in EV demand. The industry’s slump is hitting the UK particularly hard.
Nissan Motor Co., the nation’s leading manufacturer, recently slashed forecasts and announced plans to cut output and 9,000 jobs globally. Jaguar Land Rover, the country’s No. 2 producer, is making over its Jaguar brand, which won’t sell new cars in its home market until 2026. And just last week, Ford Motor Co. revealed it will eliminate 4,000 positions in Europe, primarily in Germany and the UK.
“This industry is facing a greater set of challenges today than at any point in the last 50 years,” Reynolds announced on November 26th. “The news last week from Ford, and which I received from Stellantis today, only confirms what we already knew about the scale of those challenges. But it is no less painful.”
But who should take the blame for people being too poor to afford modern vehicles or the industry attempting to pivot to EVs as a cost-saving measure?
Zero-emission mandates were already a little curious as EVs still produce pollution, it just isn’t taking place at the tailpipe. Instead, it’s happening at the power plants that provide electricity and the factories building the many components that go into their construction. However, governments are solely concerned with emissions and seem happy to help automakers forcibly raise sales of electrified products. Ironically, despite the industry being relatively eager to see the market pivot to EVs, they’ve had trouble hitting the metrics outlined by government regulators as acceptance rates for electrified powertrains appear to have plateaued.
After spending billions of dollars in government subsidies, they’re starting to evaporate all over Europe. This has made EVs less attractive to consumers, with volumes assuming a predictable trajectory on the one market where they looked to have the best shot of supplanting combustion vehicles. EVs make up a meaningful percentage of what you’ll find on European roads. But they’re relatively uncommon in the United States once you venture away from metropolitan hubs.
The Society of Motor Manufacturers and Traders (SMMT) is estimating that the United Kingdom will see about £4 billion in subsidies to help encourage people to buy all-electric vehicles this year. However, it’s also claiming that’s insufficient and that the UK government needs to allocate more taxpayer money so companies can offer even more discounts on products taxpayers don’t seem terribly interested in purchasing.
“The fact is, we are building them, but they aren’t coming in sufficient numbers to buy,” said Mike Hawes, SMMT’s chief executive officer. “We cannot incentivize that market on our own.”
Secretary Reynolds seems open to the concept and said he wants to work with manufacturers to ensure EV take rates improve so regulatory targets can be met. But reasonable people have to be asking themselves if even more subsidization of the industry that seems to be making a lot of mistakes is really the best solution.
[Image: LSP EM/Shutterstock]
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Source: The Truth About Cars
