ZEV mandate spells even bigger trouble for van makers

Car makers’ well-documented struggles to hit this year’s ZEV mandate target has eclipsed that of another struggle: to hit an even tougher target for vans.

“Industry commentators focus heavily on cars, but it’s really important that we support the commercial vehicle industry as well,” Lisa Brankin, head of the UK’s number-one van seller, Ford, told Autocar.

LCV makers’ target for 10% of their total this year to be EVs looks less onerous than the 22% share required for car makers. However, uptake of electric vans is way behind uptake of electric cars, at 4.8% after the first nine months, compared with 18%, according to the SMMT.

Unlike electric car buyers, electric van buyers are still helped by the UK government, its Plug-in Van Grant (PIVG) providing as much as £5000. But it’s still not moving the needle on sales, which actually decreased in the last four months to drop 9.5% in the first nine months.

Van makers say most electric van sales are driven by large fleets looking to fulfil ESG-focused targets for CO2 reduction. For example, Royal Mail already has the largest electric delivery fleet, at around 5000, and plans to add a further 2100 EVs in the next 12 months.

Interest for electric vans outside the big fleets is still low. “They compare the price of diesel and the price of electric. When they find a gap and on top of that have other questions to answer, then they don’t change,” Heinz-Jürgen Löw, head of Renault LCVs, told Autocar.

Renault studies show that range often isn’t a limiting factor; it’s just that there’s very little incentive to leap into the unknown for the vast majority of van buyers. Even the threat of penalties for staying with diesel power haven’t materialised.

“For many, many years, we were talking about city restrictions for ICE versions, but there aren’t many cities in Europe who really have done this,” said Löw.

Choice is getting better all the time. Market leader Stellantis for example sells EV versions of its compact, medium and large van ranges across all its LCV brands, including Vauxhall. The compact models, including the Vauxhall Combo Electric, Peugeot e-Partner and Citroën ë-Berlingo, are even made in the UK, at Ellesmere Port. Production of EV versions of medium vans such as the Vauxhall Vivaro are scheduled to start at Luton next year.

While Ford is still behind on its electric van target for the year, Stellantis is better placed. CEO Carlos Tavares even pitched to the UK government (both the previous Conservative administration and the current Labour one) to be able combine van emissions to help out the car ZEV mandate, which Tavares has strongly criticised. 

“I asked to be able bundle them. It’s good for the planet. It doesn’t ask the taxpayer in the UK for money; it just makes the ZEV mandate more easy,” he recounted to journalists at this month’s Paris motor show. The answer came back: no.

Tavares returned with another proposal, that one electric van export equal one car ZEV mandate credit. “If I’m making BEVs that I don’t sell in the UK but I export to another market, it’s good for the trade balance of the UK, it’s good for the climate and the cost for the taxpayer is zero. And the answer is still ‘no’,” he said.

Tavares has threatened to shutter one or both of Stellantis’s UK plants – which both make vans – over the issue and is now promising a “correction” in the UK market in the coming weeks to cut costs in order to make lower-margin EVs pay their way. 

The SMMT has called on the government to do more to make EVs more appealing to van customers, including keeping the PIVG after it’s due to expire next year, slash VAT on public EV charging to match home rates and improve the charging infrastructure.

“For van fleets to go green at pace, they need immediate encouragement and long-term certainty,” SMMT CEO Mike Hawes said in statement. “Without these, UK decarbonisation ambitions cannot be achieved at the world-leading speed demanded by regulation.”

As with cars, the UK has jumped ahead of the EU by a year in terms of forcing more electric van sales in its bid to reduce carbon emissions. 

Next year, however, the EU will change its rules on average CO2 emissions, meaning van makers need to sell around 20% EVs, up from a market share of just 5.8% in the first half of the year, according to the ACEA.

Van makers are in despair at the size of the target. “I have no idea how to be compliant,” said Löw.

Van makers also have to counter the effect of Chinese firms, who aren’t subject to additional tariffs either in the EU or in the UK.

So far, the biggest player has been SAIC-owned Maxus, which has six eligible electric LCVs on the government’s PIVG list. The latest is the new Maxus eTerron 9, the only electric four-wheel-drive pick-up truck so far available.

Others are coming. At the Paris show, Skywell unveiled the 223 large van, which is due to go on sale in Europe next December, with UK sales also planned.

It comes with either a 88kWh or 105kWh battery from CATL using the cheaper LFP chemistry – an advantage the Chinese have over European brands such as Renault, Ford and Volkswagen, which have stuck with the superior but pricier NMC chemistry. Claimed range is up to 280 miles. Pricing – the key factor – has yet to be revealed.

All however have to fight against the inate conversative nature of the average fleet manager, whose unofficial motto is ‘no one ever lost their job buying diesel Transits’.

Self-employed tradespeople are in similar situation. “It’s a tool for him, and so if he’s calculating and it’s not 1:1 on cost, he won’t change,” said Löw.

As the share of electric vans required by the ZEV mandate grows from 10% this year to 16% next year and 24% in 2026, van makers need to break that customer cycle of always doing the same thing. That’s going to be difficult without government help, even to the point of penalising the familiar but more polluting option.